• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Deloitte's  global powers of consumer products 2012
 

Deloitte's global powers of consumer products 2012

on

  • 2,854 views

Over the past two years, the consumer products industry seems to have recovered from its 2008-2009 slump. During this time, many leading companies have been adept at managing costs and conserving ...

Over the past two years, the consumer products industry seems to have recovered from its 2008-2009 slump. During this time, many leading companies have been adept at managing costs and conserving cash, resulting in strong balance sheets.

Looking ahead, the opportunity lies in connecting the dots in an increasingly complex consumer and customer ecosystem and winning over the ever-changing loyalties of consumers with products and value propositions relevant to their individual situations.

Find out which companies are where on this year's Top 250 list by downloading the complete report below.

Contact us to learn more about Deloitte's Global Consumer Products group.

See previous editions of this report

Statistics

Views

Total Views
2,854
Views on SlideShare
2,854
Embed Views
0

Actions

Likes
2
Downloads
73
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

CC Attribution License

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Deloitte's  global powers of consumer products 2012 Deloitte's global powers of consumer products 2012 Document Transcript

    • Global Powers ofConsumer Products 2012Connecting the dots
    • ContentsGlobal economic outlook 2Industry trends 8Top 250 highlights 15M&A activities and trends 38Q ratio analysis 43Consumer Business contacts 45
    • Global Powers of the Consumer ProductsIndustry 2012Deloitte Touche Tohmatsu Limited (DTTL) ispleased to present the 5th annual Global Powersof the Consumer Products Industry. This report identifiesthe 250 largest consumer products companiesaround the world based on publicly available datafor the companies’ fiscal year 2010 (encompassingcompanies’ fiscal years ended through June 2011).The report also provides an outlook for the globaleconomy, an analysis of market capitalization in theindustry, and a discussion of major trends affectingconsumer products companies. Global Powers of the Consumer Products Industry 2012 1
    • Global economic outlookThe economic situation for consumer products companies The global economy is decelerating, with growth in However, consumer products suppliers may 2012 likely to be slower than in 2011 in many of the find some silver linings in this otherwise cloudy world’s leading markets. environment. One positive effect of slower global growth will be continued dampening of commodity In Europe, the crisis of the euro has led to the seizing prices. Meanwhile, a number of countries are seeing up of credit markets. In an effort to rebuild investor higher retail price inflation. These include several in confidence, governments across the continent are Western Europe, the U.S., Japan, and many leading cutting spending and raising taxes, the net effect of emerging markets. which is to weaken economies and, in the process, undermine confidence even further. While the Combined with stagnant input prices, this suggests European Central Bank has helped the situation by the possibility of improved profit margins, even in the massively lending to commercial banks, the risk of context of slow top line growth. failure by Greece continues to dog financial markets despite a recent agreement on a second bailout. Another silver lining is that, in many of the slowing While there is little short-term risk that the Eurozone markets, a disproportionate share of the growth will fail, the situation is having a negative impact on of consumer income is accruing to the relatively growth. affluent. This is especially true in the United States and China. Hence, for those companies targeting The United States shows signs of accelerating upscale consumers, the environment might not be so economic activity. Yet trouble in the housing market bad. As for those targeting everyone else, the ability and its impact on credit markets continues to restrain to offer low prices to uncertain consumers will be a economic growth. While the U.S. economy may clear competitive advantage. accelerate in 2012, it will probably not lead to a rapid drop in unemployment. Finally, the most significant silver lining is the long term. Even though the economic environment in The world’s second-largest economy, China, is 2012 will be difficult, the long-term outlook for the slowing following a tightening of monetary policy global economy remains good. Global growth in combined with the negative effects of slow growth the coming decade is expected to be strong, with in Europe and the United States. While monetary particular strength coming from leading emerging policy has been reversed, 2012 will likely see the markets other than China. Of course China will grow, slowest growth in China in a decade. In addition, the but as discussed later, it faces some headwinds, both remaining BRICs face slower growth resulting from demographic and structural. Yet other emerging the lagged effects of tight monetary policy and weak markets such as India, Brazil, Turkey, Indonesia, the global growth. Andean region of South America, and much of sub- Saharan Africa offer new the possibility of stronger Only in Japan is economic growth in 2012 widely growth and new opportunities. expected to exceed that of 2011. The reason is that 2011 was so awful following the devastating earthquake and tsunami. Plus, reconstruction expenditures are likely to provide a temporary jolt to the Japanese economy. In an effort to rebuild investor confidence, governments across the continent are cutting spending and raising taxes, the net effect of which is to weaken economies and, in the process, undermine confidence even further.2
    • Let us now consider the outlook for the world’s Following the summer of 2011, Europe’s governmentsleading markets: agreed on various measures to calm markets, but to no avail. However, late in 2011 the European CentralWestern Europe Bank engaged in massive lending to commercialGiven that this publication will be distributed through banks. This improved bank liquidity, removed thecalendar year 2012, it is difficult to provide a helpful threat of bank failure, and drove down sovereignroadmap to a situation that, as of this writing, is bond yields – thereby helping troubled governmentschanging daily. So perhaps it is best to look back at to improve their finances. Yet commercial bankshow it came to this. mostly hoarded the cash they borrowed and, therefore, did not improve credit market activity. ByThe Eurozone project was intended to bind the early 2012, European governments agreed on a neweconomic and political fortunes of Europe’s bailout package for Greece that entailed banks takingeconomies in perpetuity. Yet the architecture of this a haircut on Greek debt. While this removes theunion was always lacking. Countries were required immediate danger of default, the situation in Greeceto maintain fiscal discipline, but there was never a remains troubling. In addition, commercial bankscredible vehicle for ensuring this. The first countries were required to raise capital, most likely by reducingto violate the rules were Germany and France and it lending and selling assets. This will have the effectis not surprising that others soon violated the rules. of damaging credit market activity. Thus, as of this writing, the situation in Europe has been temporarilyIndeed, the existence of the euro enabled the calmed but is by no means settled.countries of Southern Europe to borrow withabandon. Investors were happy to extend credit There are three possible scenarios as to what mightat low interest rates in the expectation that bonds happen next. In the first, Europe agrees to engage indenominated in euros were a safe asset. greater integration in order to avoid disintegration. This could entail using the European Central BankYet an absence of fiscal rectitude alone was not (ECB) to backstop sovereign debtors and create athe biggest problem. The biggest problem was fiscal union with large transfers of resources fromthat several Mediterranean economies lost their richer to poorer nations within the union. This wouldcompetitiveness. Over the past decade, their enable the Eurozone to succeed and ultimatelywages rose far faster than their productivity, with prosper. The problem with this scenario is that itthe result that it became less feasible for them to requires individual countries to give up sovereigntygenerate the strong export revenues needed to and to abide by conditions set by the richer countriesservice their external debts. Normally, a country in the EU.with a competitiveness problem will devalue itscurrency. However, because these countries nolonger have their own currencies they cannot restorecompetitiveness unless they dramatically accelerate Investors were happy to extend credit at low interestproductivity growth and/or cut wages – both a tallorder. rates in the expectation that bonds denominated in euros were a safe asset.When Greece was unable to roll over its considerabledebts and the EU bailout was deemed insufficient to The second scenario is that the Eurozone fails.correct Europe’s ailments, investors became fearful. While this could happen, the short-term costs ofGovernments faced difficulty in rolling over debts, disintegration would be catastrophic. It can beand banks that held such debts faced problems argued that, in the long run, some of the troubledraising funds. Risk spreads increased, credit market countries would be better off outside the Eurozone,activity declined, and Europe faced a new recession. but much of Europe would suffer grievously during the transition. The Mediterranean countries would face problems in gaining access to global credit markets, while the northern economies would see their currencies rise rapidly, thereby hurting exports. Hence, this scenario is politically problematic as well. Global Powers of the Consumer Products Industry 2012 3
    • The $1.7 trillion in debts issued by local governmentsChina’s economy is decelerating, the result of to fund infrastructure has been a concern for some time, but officials have downplayed the danger untiltighter monetary policy in 2011 and declining now. The fear is that multiple defaults without aexport growth. bailout from the central government, could damage the health of China’s banks. How did this come The third scenario, then, seems to be the most likely: about? Europe manages to hold the Eurozone together but fails to take action that would guarantee its success. When the global economic crisis began in 2008, and This could be called the “muddling along scenario” China’s exports suddenly dropped, the government and would likely involve a prolonged period of slow implemented a vast stimulus program to boost economic growth, political turmoil, and periodic domestic demand and offset the drop in exports. crises. Part of this involved extending credit to provincial and local governments to engage in infrastructure What does this scenario mean for consumer products development. In the short run, this policy was companies? It means continued fiscal contraction successful in boosting growth and preventing a across Europe, in part through higher taxes, and tight general recession. The problem, however, is that credit market conditions. Consumer spending would many such investments have failed to generate grow slowly, if at all. Consumers would be highly adequate returns. The Chinese government estimates price sensitive and uncertain about the future. that little more than one quarter of local government investment has produced a return adequate to China service the debts. China’s economy is decelerating, the result of tighter monetary policy in 2011 and declining Local government borrowing is not the entire export growth. In response, China’s central bank problem. During the global crisis, the government has stopped tightening policy. Therefore, although injected capital into state-run banks so that they China’s economy will slow in 2012, it will not could lend to state-run companies. The result was necessarily slow dramatically. On the other hand, an investment boom. Yet this too involved many it is notable that a senior Chinese official recently investments that are not producing an adequate predicted that growth in 2012 would be below nine return. As a result, investment in fixed assets percent. If so, it would be the first year since 2001 surged, reaching almost 50 percent of GDP last year. that growth falls below nine percent. Interestingly, Meanwhile, consumer spending declined to about there is evidence that the economic slowdown is 35 percent of GDP. Now that the Chinese economy is being experienced principally by small to medium slowing, the risk exists that China’s debtors will soon sized private businesses (especially those that export) face greater difficulties in servicing their debts. and not by the large state-run enterprises that retain favorable access to credit. As such, recent efforts to So is China at risk of having a financial crisis? The provide more credit to small business may be helpful answer is yes and no. Yes, there is a danger that a in stabilizing the economy. new round of defaults will damage the solvency of China’s state-run banking system. Yet it is likely that China’s officials have complained about the rapid the government would bail out such banks and, expansion of U.S. government debt. This reflects thereby, prevent a larger financial crisis. Indeed the fear that the massive stock of foreign currency Chinese government recently instructed banks to reserves held by China’s government could lose simply roll over loans to local governments. value. Less attention, however, has been paid to the big increase in overall debt in China itself. Yet that China does, however, face a risk. Specifically, if the is likely to change soon given the fact that overall government were compelled to bail out troubled debt has nearly tripled in the past five years. Notably, financial institutions, it would probably not support a top Chinese official recently said that the debt of continued lending for the purpose of poorly China’s local governments is “our version of the U.S. conceived investments. Consequently, investment subprime crisis.” would likely fall considerably. Given that investment is now close to 50 percent of GDP, such a fall could have serious consequences for GDP absent an offsetting increase in something else. What could that something else be?4
    • Exports are not likely to take up the slack. Instead, United StatesChina will look toward a boost in consumer spending As of this writing, the U.S. economy is showing signsto offset a decline in investment. Yet given that of modest strength. There is growth, but not theconsumer spending is now only kind that has followed past recessions when housing35 percent of GDP, it would have to grow very made a sizable contribution to the recovery. Instead,rapidly to make a difference and avoid a significant growth has been relatively anemic and the housingeconomic slowdown. market remains troubled. Partly as a consequence of this, credit markets have not been strong and bankThere are, however, some positive signs concerning lending has only begun to recover following a longthe prospect for consumer spending. First, wages slide. Moreover, the troubles in Europe could havehave been rising, adding to real disposable incomes. a negative impact on credit activity in the UnitedThis reflects a shortage of labor, as demographic States.trends limit labor force growth and as internalmigration slows. In addition, provincial and local Despite these headwinds, U.S. consumers continuegovernments have been increasing their minimum to spend. This is a bit surprising given the variouswage. Second, the government intends to have state- negative influences they have faced. Unemploymentrun companies pay higher dividends to shareholders is uncomfortably high at above 8 percent, real(mainly the government). This money could be used disposable incomes have been declining over the pastto boost overall spending. Third, high inflation might year, and various measures of consumer confidencespur more spending by consumers. Fourth, the have only recently recovered from historic lows. Yetcurrency is gradually being allowed to rise in value. consumer spending has been rising. There are variousThis reduces import prices and helps to stimulate explanations. First, consumers have substantiallyconsumer spending. paid down debts. Today, debt service payments as a share of income are at the lowest level sinceOn the other hand, the biggest negative for 1993. Thus, consumer cash flow has improved. Inconsumer spending is simple demographics. Due to addition, the increase in spending lately has been atthe lagged effect of the one child policy, the labor the expense of saving. The saving rate has declined,force is expected to grow much more slowly in the suggesting a higher degree of confidence on the partcoming decade than it did during the past ten years. of consumers – despite what they tell survey takers.As such, the prime consuming age cohort will barely Finally, it is likely that there is considerable pent-upgrow while the elderly population will grow rapidly. demand following a long dry period.Finally, one side effect of China’s unbalanced Consumers may feel a bit more confident becauseeconomy is a sharp increase in income inequality. the overall economy is showing signs of renewedWhile incomes have increased overall, lower income strength – albeit modest strength. In the first half ofcohorts have not seen significant increases in 2011, economic growth was so anemic that manypurchasing power, especially as home prices have pundits worried that the United States was headingincreased dramatically. into a new recession. Today, fears of a double dip have abated somewhat as growth has accelerated.There are reasons to expect that in the coming Industrial activity has been rising moderately, withdecade China’s economy will grow more slowly than particular focus on production of capital goods.in the past. Although consumer spending is likely toincrease as a share of GDP, it is not clear that it will In addition, exports have been strong. Althoughbe sufficient to create a consumer spending boom. export growth has decelerated somewhat as the global economy has slowed, it remains strong and contributes substantially to overall GDP growth. This reflects the effects of a relatively weak dollar and theThere are reasons to expect that impact of a decade of sizable productivity gains forin the coming decade China’s the manufacturing sector.economy will grow more slowlythan in the past. Global Powers of the Consumer Products Industry 2012 5
    • Finally, recent growth has been almost entirely For consumer products companies, the U.S. due to increased demand for goods and services. economic environment is lukewarm. A reasonable There has been little inventory accumulation and expectation for the coming year is that consumer inventories remain historically lean. This is good news spending growth will be positive but modest, that as it means that the increased output was mostly inflation will be low, that consumers will remain due to increased demand. It also bodes well for the relatively price sensitive, and that commodity prices future, as further increases in demand will require will be soft. It is also a reasonable assumption that, to more production rather than dipping into existing the extent there are income gains, a disproportionate inventories. share will accrue to upper income households. Thus, spending growth will be bifurcated. The impact of economic policy has been mixed. On the one hand, monetary policy remains supportive of Japan growth. Although the Federal Reserve is no longer Japan suffered grievously in 2011 due to the terrible engaged in “quantitative easing,” it is engaged in a earthquake and tsunami. Aside from the unspeakable policy designed to reduce long-term interest rates human cost, there was a big economic cost as and, therefore, stimulate more credit demand. well. The sharp drop in electricity production and While it is too early to say whether this has been the damage to transport infrastructure led to a big effective, the decline in bank lending has reversed decline in industrial output. Not only did this lead to and consumer willingness to take on new debt has a drop in Japan’s GDP, it had a global impact as well increased substantially. The Fed has indicated that as much of the global automotive and electronics it is open to another round of quantitative easing industry supply chains are dependent on Japan’s should the economy generate disappointing growth. participation. Fiscal policy is a different story. During 2011, the While growth in the third quarter of 2011 was very President and the Congress failed to reach an strong, the economy slid again in the fourth quarter agreement on dealing with long-term budgetary – partly because of the impact of Thailand’s floods issues. This resulted in the first ever downgrade of on industrial supply chains. Going forward, the the U.S. government. Although the bond market Parliament has allocated the equivalent of US$240 yawned at this news, it probably had a negative billion on reconstruction, most of which will be spent impact on business confidence. However, if the in the coming year and-a-half. This should have a Congress does absolutely nothing, the budget deficit positive impact on growth in 2012. will decline considerably. That is because, under current law, taxes are scheduled to rise considerably Still, Japan faces some challenges. First, it is likely at the end of 2012 yielding nearly $3 trillion over that the reconstruction spending will be financed ten years. In addition, there have already been $2.2 in part by higher taxes on consumers, and this will trillion in spending cuts built into future budgets. probably have a negative impact on the consumer. Thus, the real issue facing the Congress is how to Second, Japan remains highly dependent on exports. eliminate those tax increases and find offsetting Yet the value of the yen is at an historic high and is reductions in future budget deficits. not expected to come down. Moreover, as the global economy slows, export growth is likely to decelerate. In addition, because the earthquake damaged nuclear generating capacity, Japan has had to importA reasonable expectation for the coming year is that oil and gas to close the gap. This has resulted in a large trade deficit, hurting economic growth.consumer spending growth will be positive butmodest, that inflation will be low, that consumers Finally, although Japan’s central bank has engagedwill remain relatively price sensitive, and that in a more aggressive monetary policy, this alonecommodity prices will be soft. may not be sufficient. The goal of such a policy is to increase inflation, reduce real interest rates, and stimulate more spending and credit market activity. Yet as of this writing, inflation remains very low, consumer spending is anemic, and credit market activity is poor. Absent a more aggressive policy, it is likely that Japan’s economy will grow slowly following the end of reconstruction spending.6
    • India BrazilIndian distribution briefly made global headlines As in much of the emerging world, Brazil’swhen the government announced it had changed policymakers have quickly shifted from a focus onthe rules regarding foreign investment in retailing. excessive inflation toward a focus on growth. InMulti-brand foreign retailers would be permitted to the first half of 2011, Brazil was growing rapidlyown up to 51 percent of an Indian retail enterprise. In and experiencing uncomfortably high inflation. Thethe long-term, this would have a positive impact on central bank raised interest rates, which resulted ineconomic growth and could lead to a rationalization a sharp rise in the value of the currency and harmedof the supply chain, greater supply chain efficiency, export competitiveness. Yet by the second half ofand greater effective spending power for consumers. the year, with domestic demand decelerating andIt would also be beneficial to the world’s leading exports being harmed by slower global growth, theretailers as they continue to seek global opportunities central bank shifted and cut interest rates.beyond the Chinese market. However, facing seriousopposition, the government backed down and Going forward, Brazil is likely to have modestwithdrew the planned liberalization. At this writing, growth in 2012 and declining inflation. Interestingly,it is not clear whether and when this proposal will be consumer spending has held up well despite theoffered again. economic slowdown. This was due in part to continuing growth of consumer credit. While positiveThe short-term outlook for India is a bit cloudy. The for spending, this credit expansion does pose a risk tocountry’s economy is clearly slowing following a the economy and especially to the banking system.period in which monetary policy was tightened inorder to fight inflation. The problem is that although Longer term, the prospects for Brazil’s economythe monetary tightening resulted in slower economic and consumer sector are very good. With a youthfulgrowth, it did not bring inflation down. Now population, favorable economic policies, and sizablepolicymakers are faced with the conundrum of slow foreign direct investment, growth should be strong.growth with persistent inflation. In addition, roughly half of Brazil’s exports are now manufactured goods. This is a big change from theThat said, India is relatively immune to the problems past when Brazil was largely a commodity exporterin the global economy. That is because trade is a and it suggests a less volatile future. Improvingmodest share of GDP in India. In addition, India’s income distribution and the rapid rise of the middlefinancial sector is not highly exposed to the troubles class also bode well for continued growth of modernin European credit markets. Thus, even a worsening retailing.of the situation in Europe is not likely to have a bignegative impact on India. Russia Russia’s growth has been moderately strong latelyLonger term, India’s prospects are good. The country owing to the strength of commodity prices. Inhas a youthful population, which bodes well for addition, there are indications of greater openness togrowth and consumer spending. Economic policy has foreign investment in the commodity sector, whichbeen supportive of growth through deregulation. In would offer the possibility of increased commodityaddition, India’s capital markets have funneled credit production. Yet Russia’s continued dependence onto entrepreneurs, contributing to growth. However, commodities makes it vulnerable to volatile prices.India has obstacles. These include a high degree Russia is also highly dependent on Western Europe,of trade protection, continuing regulation of labor and a deepening crisis there would have a strongmarkets, and uncertainty regarding the future of negative impact on Russia.policy. As long as the economy grows, Russian consumer spending has good prospects, at least in the largest cities where a disproportionate share of spending power exists. On the other hand, a declining and aging population means that longer-term prospects are not great. And a failure to diversify away from commodities puts the consumer sector at the mercy of forces beyond the control of Russia’s authorities. Global Powers of the Consumer Products Industry 2012 7
    • Global trends and issues affecting the consumerproducts industry in 2012 In 2012, most of the consumer products companies Over the past few years, consumer products on the top 250 list will continue to seek global companies have learned some valuable lessons growth opportunities, pursue business model about global expansion and growth. While innovations to win with consumers and customers, emerging markets will continue to be the engine and establish more effective ways to manage of growth thanks to an increasing middle class uncertainty. With the economic crisis in Europe, and domestic consumer demand, capturing this increasing social unrest in various regions and growth comes with significant challenges. Firstly, elections in several developed markets, 2012 will understanding the consumer in each of these markets present an unstable environment for consumer (and in some cases in each region within a market) products companies. Leaders will, however, continue is a task that cannot be underestimated. Local to pursue both top-line and margin growth. tastes, preferences, and affordable price points have According to a recent report from Forbes Insights1, huge implications for how products are developed, 38 percent of senior executives view “improving manufactured, and promoted. With increasing top- and bottom-line performance” as their top advertising costs in many emerging markets, strategic priority, followed by “expanding into global consumer products companies will also continue to and new markets” at 33 percent. Key emerging seek optimal ways of allocating marketing investment markets will continue to present the highest growth across multiple channels. For example, word of opportunities for consumer products companies, mouth campaigns seem to generate the highest ROI with countries such as Brazil, China, and India driving in Asian markets, but they are extremely difficult to global GDP growth. This global growth agenda will execute successfully without local market knowledge. result in strong corporate M&A activity, proactive Secondly, intense price competition, wage inflation management of category and brand portfolios, and and the cost of real estate in emerging markets put significant investments outside the core developed great pressure on margins and profitability. Consumer markets that are home to most of the world’s leading products companies will continue to evolve their consumer products companies. business and commercial operating models in order to be successful and profitable. Product innovation, combined with effective pricing strategies, will be key areas of focus for the companies that will succeed in 2012 and beyond. Finally, managing global talentIn 2012, most of the consumer products companies is becoming a key priority for consumer productson the top 250 list will continue to seek global companies and will be a prerequisite for achievinggrowth opportunities, pursue business model successful global growth. Recent research from the Deloitte member firm in the United States found thatinnovations to win with consumers and customers, nearly one in four executives (23 percent) surveyedand establish more effective ways to manage cited competing for talent globally and in emerginguncertainty. markets as a top talent concern2. When asked to look forward three years from now, the global talent search rises even higher on the agenda to 27 percent. Global mobility initiatives, training and competency development programs, and cross-border canters1 Forbes Insights’ Survey ‘ of excellence will continue to dominate the talent of 376 senior executives and talent managers at agenda for consumer products companies in 2012. large companies (annual sales of +$500 million) worldwide; Forbes, October 20112 Talent Edge 2020: ‘ Redrafting talent strategies for the uneven recovery’; Deloitte Development LLC, January 20128
    • Consumer products companies will continue to evolve, and in somecases rethink their operating models in order to be competitive in theglobal marketplace.Consumer products companies will continue to Use analytics to inform where to play and howevolve, and in some cases rethink their operating to winmodels in order to be competitive in the global One of the biggest challenges that consumermarketplace. Changes in governance models, products companies will face in 2012 will be theincluding corporate structures and decision-making growing need to strengthen the skill-sets, tools, andhierarchies, will continue to evolve to meet the processes that enable them to convert data into realneed for de-centralized and real-time decisions insights in an effective and timely manner – andaligned with wider business and brand strategies. to use those insights to inform business decisions.Functional processes and procedures will also Depending on geography, consumer productsneed to evolve. Marketing and sales investment companies are faced with either a plethora or aallocation rigor, proactive financial stewardship, and lack of data. Countries with concentrated modernsustainable practices throughout the value chain will trade usually have an abundance of consumer,increasingly become business as usual. Commercial shopper, and customer data. By contrast, in mosttransformation will become a higher priority in the emerging markets dominated by a traditional retailconsumer products sector as businesses grapple with trade this data either does not exist or is at best farthe need to rethink traditional marketing and sales from complete. Consumer products companies willmodels to meet the needs of a radically different continue to invest time and effort in analyzing ‘data’business and consumer environment. to track changing value and profit pools in and across markets and to understand trends, behaviors, andThe companies that get it right will rise to the patterns of activity that provide the insights neededtop and become global leaders in the increasingly to achieve and sustain competitive advantage.interconnected consumer business landscape. More than ever, consumer products companiesThe magnitude of the untapped opportunity goes that best integrate and use consumer, shopper,beyond much-discussed general trends such as the and customer insights to drive strategic and tacticalrising middle classes in emerging markets and innovation and optimize engagement with individualsthe increasing importance of social media. throughout the journey to the point of purchase willThe true opportunity lies in connecting the dots in ultimately win at the shelf.an increasingly complex consumer and customerecosystem and winning over the ever-changing Winning at the shelf – physical or virtual – alsohearts and minds of consumers and shoppers with requires constructive collaboration with the retailer.products and value propositions relevant to their Consumer products companies will continue toindividual situations. seek strategic alliances with retailers based both on quantitative factors such as current and projectedThese themes, and how consumer products profitability, as well as qualitative factors such ascompanies can respond to them, are explored in alignment of strategic objectives, compatibility ofmore detail in the paragraphs that follow. supporting tools and processes, and cultural fit. While often fraught with tension, such relationships will be crucially important. Global Powers of the Consumer Products Industry 2012 9
    • At the corporate level, consumer products companies As shoppers make the switch from branded to will continue to leverage scenario planning and private label products, the study also found that econometric modeling to better manage macro- about 93 percent of them expect to continue economic and political uncertainty. Indeed, leading ‘spending cautiously’ on private label products, consumer products companies are becoming more even after the economy improves. Unlike previous sophisticated in establishing global Enterprise Risk economic recessions that caused temporary changes Management governance, processes, and systems. in shopping habits, this prolonged recession may be Businesses are beginning to quantify drivers of value turning frugal shopping habits into more permanent at risk that have previously not been quantified, consumer behavior. such as the impact of increasingly stringent product regulation. Not surprisingly, many leading consumer More consumer products companies are taking product companies are evaluating the impact the view that part of the answer to the margin of structural changes in the Eurozone and their challenge lies in revisiting product portfolios within potential impact on areas such as pricing and supply the category. This process typically involves altering chain management. consumer unit size and packaging types (pack type is an important part of the consumer/shopper value Use pricing as a strategic lever to win with equation), and developing a ranked good/better/ consumers, shoppers, and retailers globally best product portfolio, while also considering Pricing has always been an area of focus for potential variants for specific consumer needs. consumer products companies. However, the Changed category propositions of this sort are then accessibility and transparency of pricing information tested with consumers and shoppers through a to consumers and shoppers, as well as the global combination of qualitative and quantitative research scale and power of major retailers, pose significant into what drives perception of value, typically using challenges in the way consumer products companies analytics and modeling techniques to establish the think about their pricing strategy. To manage pack/price/preference parameters that describe the the increased complexity and margin pressures, determinants of consumer choice. The results of this consumer products companies will increasingly use type of research and insight are then used to develop the latest technological advances such as analytics a win-win category proposition for each retailer. and pricing management tools to optimize consumer At the core of such a strengthened category pricing and trade pricing, as well as to maximize the proposition is alignment of category strategy, returns on investment from marketing and trade brand architecture, and pricing architecture – such spend. alignment is critical in creating a stronger proposition for the retailer and the consumer that offers real Private label products will continue to be a significant up-side in category margin. and growing competitor to branded consumer products companies in 2012 and beyond. In many Use digital media as a key strategy to ‘own the major markets around the world, private label consumer’ throughout their journey with your penetration has increased as the global economic brand recession continues to burden the world’s largest There is no doubt the rapid pace of digital media markets. Since mid-2008, private label’s U.S. market growth has transformed the way consumers think, share of total consumer products unit-volume has behave and interact with each other and with grown by more than 16 percent from about businesses. However, most consumer products 18 percent in mid-2008 to over 21 percent in companies struggle with adapting their strategies, January 2011. With private label in European grocery capabilities and internal processes to meet these new representing more than a 45 percent share this may consumer needs. Consumers utilize digital and social still have some way to go. Furthermore, a recent media throughout their purchasing journey – from study demonstrated that roughly 85 percent of browsing, to product identification and comparison, shoppers in the U.S. currently rate store brands as to purchasing, and post-purchase customer service.3 The 2010 American ‘ Pantry Study’, Deloitte equal in quality to national brands3. Development LLC and Harrison Group, 201010
    • The implications for consumer products companiesare huge – as is the opportunity to engage withcustomers in an effective and timely manner to build In 2012 and beyond, consumer products companieslong-term brand loyalty. More and more businesses will increasingly integrate sustainable practices intoare moving beyond thinking about digital media their core operating models throughout the valueas an additional and, perhaps, more effective, chain.communication channel that allows for highlypersonalized and targeted engagement. Increasingly,companies are moving to to a more structured way of In 2012 and beyond, consumer products companiesintegrating digital media into their broader marketing will continue to move away from Corporateand corporate strategies. What’s clear is that the Social Responsibility (CSR) and a separate set ofworld’s leading consumer products companies are sustainability initiatives. Instead, they will increasinglyembracing digital media as a platform for large-scale integrate sustainable practices into their coredirect consumer engagement. Such engagement will operating models throughout the value chain – fromserve many purposes – to inform innovation, test sourcing and waste management to consumernew products, nurture and support brands, sell direct engagement with the brand. Increasing numbers ofand provide after sales service. Most importantly, it companies are recognizing that sustainability can bewill help enable consumer products companies to a primary driver for strategic product and businessunderstand their consumers better as individuals and model innovation that makes them more relevant totarget them accordingly. Again, the use of data and consumers, captures market share, and helps themanalytics will be key to this. continue to operate effectively in a changing world.Building teams that focus exclusively on digital One of the key drivers of the need for change ischannels, developing talent that understands consumer expectations. Yes, consumers will continueand anticipates future digital trends, and shifting to place strong emphasis on price, convenience andinvestments from traditional to digital marketing quality in making their decisions about where toare only a few of the initiatives that consumer shop and what to buy. However, increasing numbersproducts companies are likely to pursue as they of them will want explicit reassurance that what theyre-think their digital media strategies. While the buy will be ‘good for the planet’, and most will likelyspecific optimal digital media strategy will vary by expect that businesses are already operating to thecompany, geography, and product category, there highest possible standards in this respect. Businessis one constant denominator for consumer products leaders are increasingly recognizing that they haveexecutives – the need to meaningfully engage the responsibility, capability, and self-interest towith consumers throughout their journey with achieve real beneficial change in consumer behaviorstheir brands and convert them from merely loyal through the way their products and marketingcustomers into active brand advocates. messages touch people’s lives every day.Use sustainable practices as a key componentof the growth agendaConsumer products companies will increasinglyoperate in a resource-constrained, climate-impactedworld that requires businesses to place sustainabilityat the center of what they do and how they do it. It’snot a nice to have; it’s about the very sustainability ofthe business model. Global Powers of the Consumer Products Industry 2012 11
    • It is also likely that more consumer products • ider business model optimization: to better W companies will collaborate with government, civil align global, regional, and in-market decision- society, and even competitors to tackle massive rights with the category and brand portfolio societal problems such as water scarcity and of the business and to extend the adoption of deforestation. Increasing regulation and taxation, structures that reduce effective tax rates and free as well as highly volatile commodity costs, will up additional resources to invest in growth. increasingly result in true resource costs being reflected in the price of products for the consumer, Commercial Transformation: The consumer in which will change behaviors based on affordability 2012 is very different from the consumer of just a and the perception of value versus personal values. few years ago. What is even more astonishing is This, in turn, will provide new incentives for R&D and the pace at which consumer behavior is changing. product innovation. Practices such as closed loop Today’s consumer is able to access and share real- and localized supply chains, water management and time information and has a radically different way of carbon labeling will help enable organizations to making purchasing decisions. For example, point- create both value and competitive differentiators. of-purchase activities are more important than ever, Businesses that successfully take their consumers with coordination of messages along the entire on this journey are likeliest to remain relevant in the purchasing funnel becoming increasingly critical to long term. maximizing conversion rates. Integrating consumer, shopper, and customer/ outlet-based insights will Review the operating model of the business therefore be essential in shaping optimal strategies to ensure it delivers the capabilities needed to and tactics to win at the point of purchase. This has win in markets around the world profound implications for organizations in which There is increasing focus on strengthening marketing and sales still operate largely within capabilities and adapting operating models to traditional silo-based structures. Going forward, underpin strategies to enhance organic growth. marketing strategies have to be integrated “through Three facets of the business operating model are the line” in strategy, planning, and execution. top priority for most leading consumer products companies: Moreover, understanding and meeting the needs of each consumer segment with the right general • ommercial transformation: to create new C value propositions will be necessary but not sufficient capabilities and underpin effective through-the-line to win with this consumer. Personalization and integration of marketing spend. relevance to individual needs are becoming ever more critical to being noticed, ensuring relevance • Finance transformation: to bring new levels of to the individual and, while that lasts, achieving a financial literacy to commercial and operational degree of loyalty. decision making. In order to successfully execute this consumer-centric strategy, consumer products companies will continue to innovate across multiple areas of their value chainThere is increasing focus on strengthening – from introducing new marketing and distribution channels, to acquiring new skills and, finally, tocapabilities and adapting operating models to establishing new multi-channel business models.underpin strategies to enhance organic growth. Given the way that global brand portfolios evolve, finding the right governance and operating models to prioritize investment behind global, regional, and local brands becomes ever more important.12
    • Although there is no one-size-fits-all solution forall companies, most will continue to evolve their Technological advancements will continue to change the way that consumer products companies think about every aspect of their business – from productcommercial operating models to embrace digital, innovation to supply chain managementsupport new channels, and integrate every point ofengagement on the path to purchase. Ever since the invention of newsprint, then radio and then television consumer products companies have made use of the latest available technologies to win the hearts and minds of consumers and shoppers. In some ways therefore nothing hasFinance transformation: The changing role of changed. However, what has changed is the pace of change and the power of thefinance within the business is a key area of focus new communications technologies that have recently emerged to connect people and provide complete transparency of information. Consumer products companiesfor virtually every CFO in the consumer products need to embrace these new technologies and recognize how they impactsector. Today’s finance organizations must execute different aspects of the business such as innovation, brand development, revenueon a much broader range of responsibilities management, and demand planning.than existed in their traditional role as stewards Full pricing transparency, access to real-time product availability at the store level,of the finances of the business. The traditional and technology-enabled consumer-to-consumer influencing are just a few examplesresponsibilities for information quality and of the way the consumer’s ‘path to purchase’ is being reshaped. As a result, consumer products companies are increasingly looking to new ways of gatheringconsistency, finance talent management, internal and using consumer and shopper insights to design, develop, and test products;controls and corporate governance, and overall to communicate the brand value proposition; and to ensure efficient distributionfinance function effectiveness remain. However, throughout the traditional and new channels in which they operate. Recognizing the inevitable challenges in retail-supplier relationships, the need to align everythere is more emphasis on business partnering and touch-point on the path to purchase requires close collaboration with retailers, whobusiness performance management, as well as on still dominate the consumers’ attention in-store. This will continue to be critical tofinance professionals acting as coaches to functional ensuring that the product is placed, priced, and promoted at the right level. In 2012, it is expected that innovative technologies, such as self-service checkout via mobileroles across the business. This is part of a broader phone apps and personalized digital coupons – promoted by the retailers, or evenchange in which the role of finance is evolving from by the consumer products companies themselves– will increasingly be tested with“decision support” into an integral part of decision consumer and shoppers globally.processes at every level of the business.In a volatile global environment, the ability torespond quickly to changes in the market based Wider business model optimization: For manyon accurate facts and forecasts will be increasingly consumer products companies, the combination ofimportant to a company’s ability to avoid organic and inorganic growth over many years hasunwarranted costs and to get the best return on resulted in complex portfolios of global, regional,every dollar, Euro, or Yuan spent. Most consumer and local brands. While a rich portfolio of brandsproducts companies have already established new is a huge asset, in increasingly competitive marketsfinance operating models underpinned by integrated around the world it is critically important thatERP systems and characterized by shared services in-market investment decisions reflect both localfor transaction processing, centers of excellence for market realities and above-market category andspecialist skills areas such as treasury and tax, and brand strategies. Most global consumer productsrefocused in-market finance functions. Businesses companies have matrix operating models thatthat build on this by developing the right finance reflect the need to manage the business fromcompetencies and skills supported by the right both a category and geography perspective.information strategies and business analytics tools Optimizing how this matrix works is thereforewill acquire capabilities that make a real difference important, and companies across the industry areto succeeding in the market and delivering optimal increasingly focused on achieving this in severalshareholder returns. ways: improvement of top-down and bottom-up strategy and planning processes to ensure top-to- bottom alignment behind investment priorities and plans; removal of ambiguities in decision rights and accountabilities between in-market and above- market roles; and increasing focus on above-market leadership from a like-market archetype perspective rather than geography. Global Powers of the Consumer Products Industry 2012 13
    • A look into the ‘virtual store’ Consumer products companies and retailers are seeking new and innovative ways of engaging with consumers and shoppers like never before. Virtual stores provide one way to stimulate impulse purchases and capture pent-up demand from mobile consumers. The concept, which has been successfully executed by Tesco in South Korea and is being piloted by Procter & Gamble in Prague’s subway stations,7 is likely to become much more widespread. It plays to the growing demand for convenience while providing a powerful marketing opportunity. For consumer products companies that seek new channels to reach consumers, utilizing mobility is a new cost-effective way of increasing sales without having to invest in real estate. For time-constrained and technologically savvy consumers it is a convenient on-the-go shopping experience, as simple as capturing the quick- response (QR) codes alongside the brand images with a hand-held device. It is not surprising that companies such as Tesco, Procter & Gamble, and others are already experimenting with the concept. An additional operating model concern for many In the context of an IT strategy for a consumer companies is ensuring that the business is structured products company, this means that the focus needs efficiently from a tax perspective. For example, most to be outward, not inward. leading consumer products companies with pan- European businesses have already established central In 2012, consumer products companies will have entrepreneur/low-risk distributor structures in the no shortage of technological capabilities at their region. The success of these structures in reducing fingertips; nor will they lack available data, with data effective tax rates has prompted many to explore volumes doubling every 14 months6. However, the their application in regions such as Asia Pacific increasing complexity of global business and the where, in spite of slightly different tax regimes, proliferation of media (and, as a result, consumer similar opportunities exist. touch points) make uncovering hidden insights a challenging task. It is no surprise that more and Recognize that the IT strategy of the business more consumer products companies are integrating has to change business performance improvement, information Most leading consumer products companies have management, and advanced analytics initiatives to invested heavily in their core ERP systems over the meet the needs of their businesses. In many cases,4 Additional information past decade and many have a reasonably complete consumer products executives will seek to deploy is available in Deloitte Consulting LLP (2011), operational ERP infrastructure. Nearly half of all existing and new technologies in a disruptive way, to “Tech Trends 2011: The organizations with ERP implementations plan to make further engage with consumers and customers and natural convergence investments to expand their capabilities in the next to provide the analytics and insights that can ensure of business and IT”, Chapter 7 year4. Most of these consumer product companies that such engagement is relevant and successful. are making a clear distinction between the “need to5  he Power of Pull: How T play” vs. “play to win” processes, and will continue to Small Moves, Smartly Made, Can Set Big Things establish a clearly defined corporate strategy for how in Motion, by John Hagel each process will be enabled for the business. III, John Seely Brown, and Lang Davison, Deloitte Development However, given the digitally-enabled world that is LLC, 2010 becoming the new reality, the leading consumer products companies are undergoing a profound6 Additional information is available in Deloitte rethink of their IT strategy. According to a recent Consulting LLP (2010), publication by the ‘Deloitte Centre for the Edge’5, “to “Depth Perception: A get better faster at whatever it is you do, you’ve got dozen technology trends shaping business and IT to be supported by a broad array of complementary in 2010”, Chapter 10 people and resources from which you can pull what you need to raise your rate of performance7  rocter & Gamble P website (link: http:// improvement”. news.pg.com/blog/ innovation/pg-and- mallcz-introduced-first- virtual-drugstore-czech- republic14
    • Top 250 highlightsConsumer products industry rebounds in 2010 despitecontinuing economic malaise Top 250 quick stats, 2010The consumer products industry ended 2009, one of the toughestyears in the world’s economic history, poised for a rebound. And • $2.82 trillion – aggregate sales of Top 250 in US$in 2010, robust sales growth and profitability prevailed, despite apersistent feeling of unease about where the global economy was • $11.3 billion – average size of Top 250 consumer productsheaded. companiesAlthough a durable economic recovery still appears distant, • $2.5 billion – minimum sales required to be on Top 250 listcomposite, currency-adjusted sales grew 8.4 percent in 2010 for the250 largest consumer products companies, nearly a 10 percentage • 8.4 percent – composite year-over-year sales growthpoint turnaround from the prior year’s 1.2 percent decline in sales.Unlike 2009, when 60 percent of Top 250 companies experienced • 8.5 percent – composite net profit marginnegative sales growth, more than three-quarters of Top 250companies reported a sales increase in 2010. • 0.9x – composite asset turnoverThe vast majority of the companies that disclosed their bottom- • 7.5 percent – composite return on assetsline results also were profitable in 2010 (201 of 216 companies).The composite net profit margin for the 216 reporting companies • 27.8 percent – economic concentration of top 10was 8.5 percent, an increase of more than two percentage pointsover 2009’s 6.4 percent result. While the group’s composite assetturnover remained the same in 2010 at 0.9 times, better profitabilityled to higher return on assets: 7.5 percent compared with 5.6percent in 2009.The 250 largest consumer products companies generated combinedsales of more than $2.82 trillion in 2010. This is a significantincrease over 2009, when sales for the Top 250 totaled$2.57 trillion. Average sales volume for the Top 250 companieswas $11.3 billion in 2010. To rank among the global powers of theconsumer products industry required net sales of at least $2.5 billion,up from $2.3 billion in 2009. Global Powers of the Consumer Products Industry 2012 15
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin1 Samsung Electronics Co., Ltd. South Korea Asia/Pacific Electronic Products 134,528 11.2% 10.4%2 Nestlé S.A. Switzerland Europe Food, Drink & Tobacco 105,492 2.0% 32.2%3 Panasonic Corporation Japan Asia/Pacific Electronic Products 101,704 17.2% 1.0%4 The Procter & Gamble Company United States North Personal & Household 82,559 4.6% 14.3% America Products5 Sony Corporation Japan Asia/Pacific Electronic Products 73,761 0.2% -3.1%6 Apple Inc. United States North Electronic Products 65,225 52.0% 21.5% America7 Unilever Group Netherlands and Europe Food, Drink & Tobacco 58,775 11.1% 10.4% United Kingdom8 PepsiCo, Inc. United States North Food, Drink & Tobacco 57,838 33.8% 11.0% America9 Nokia Corporation Finland Europe Electronic Products 56,364 3.6% 3.2%10 Kraft Foods Inc. United States North Food, Drink & Tobacco 49,207 21.8% 8.4% America11 LG Electronics Inc. South Korea Asia/Pacific Electronic Products 48,506 -23.6% 2.3%12 Anheuser-Busch InBev SA/NV Belgium Europe Food, Drink & Tobacco 36,297 -1.3% 15.9%13 Sharp Corporation Japan Asia/Pacific Electronic Products 35,357 9.7% 0.7%14 The Coca-Cola Company United States North Food, Drink & Tobacco 35,119 13.3% 33.8% America15 Koninklijke Philips Electronics N.V. Netherlands Europe Personal & Household 33,754 9.6% 5.7% Products16 Bridgestone Corporation Japan Asia/Pacific Tires 32,680 10.2% 3.7%17 JBS S.A. Brazil Latin Food, Drink & Tobacco 31,426 60.5% -0.5% America18 Mars, Incorporated United States North Food, Drink & Tobacco 30,000 e 7.1% n/a America19 Japan Tobacco Inc. Japan Asia/Pacific Food, Drink & Tobacco 29,088 -1.1% 6.0%20 Tyson Foods, Inc. United States North Food, Drink & Tobacco 28,430 6.5% 2.7% America21 Philip Morris International Inc. United States North Food, Drink & Tobacco 27,208 8.7% 27.6% America22 L’Oreal SA France Europe Personal & Household 25,888 11.6% 11.5% Products23 Compagnie Générale des France Europe Tires 23,757 20.8% 5.9% Établissements Michelin S.C.A.24 Imperial Tobacco Group PLC United Kingdom Europe Food, Drink & Tobacco 23,415 1.8% 10.1%25 British American Tobacco plc United Kingdom Europe Food, Drink & Tobacco 23,014 4.8% 21.1%26 Danone France Europe Food, Drink & Tobacco 22,587 13.5% 12.0%27 Lenovo Group Limited Hong Kong Asia/Pacific Electronic Products 21,594 30.0% 1.3%28 Heineken N.V. Netherlands Europe Food, Drink & Tobacco 21,423 9.7% 9.6%29 Kirin Holdings Company, Limited Japan Asia/Pacific Food, Drink & Tobacco 20,959 -4.3% 1.2%30 NIKE, Inc. United States North Fashion Goods 20,862 9.7% 10.2% America31 Haier Group China Asia/Pacific Home Furnishings & 20,075 9.2% n/a Equipment32 Henkel AG & Co. KGaA Germany Europe Personal & Household 20,041 11.2% 7.6% Products33 Acer Incorporated Taiwan Asia/Pacific Electronic Products 19,973 9.6% 2.4%34 Research In Motion Limited Canada North Electronic Products 19,907 33.1% 17.1% America35 Suntory Holdings Limited Japan Asia/Pacific Food, Drink & Tobacco 19,898* 12.4% 2.7%36 Kimberly-Clark Corporation United States North Personal & Household 19,746 3.3% 9.8% America Products37 The Goodyear Tire & Rubber United States North Tires 18,832 15.5% -0.9% Company America38 Whirlpool Corporation United States North Home Furnishings & 18,366 7.4% 3.5% America Equipmentn/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate16
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin39 Altria Group, Inc. United States North Food, Drink & Tobacco 16,892 0.4% 23.1% America40 adidas AG Germany Europe Fashion Goods 15,921 15.5% 4.7%41 Diageo plc United Kingdom Europe Food, Drink & Tobacco 15,808 1.6% 20.3%42 Colgate-Palmolive Company United States North Personal & Household 15,564 1.5% 14.9% America Products43 Svenska Cellulosa AB SCA Sweden Europe Personal & Household 15,195 -1.5% 5.1% Products44 SABMiller plc United Kingdom Europe Food, Drink & Tobacco 15,145 6.7% 16.9%45 Cargill Meat Solutions Corporation United States North Food, Drink & Tobacco 15,000 e 0.0% n/a America46 General Mills, Inc. United States North Food, Drink & Tobacco 14,880 0.6% 12.1% America47 AB Electrolux Sweden Europe Home Furnishings & 14,803 -2.6% 3.8% Equipment48 Ajinomoto Co., Inc. Japan Asia/Pacific Food, Drink & Tobacco 14,130 3.1% 3.0%49 Kao Corporation Japan Asia/Pacific Personal & Household 13,886 0.2% 4.0% Products50 Groupe Lactalis France Europe Food, Drink & Tobacco 13,810 22.4% 3.0%51 Fomento Económico Mexicano, Mexico Latin Food, Drink & Tobacco 13,342 -14.1% 26.7% S.A.B. de C.V. (FEMSA) America52 Reckitt Benckiser Group plc United Kingdom Europe Personal & Household 13,071 9.0% 18.6% Products53 Meiji Holdings Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 13,035 0.7% 0.9%54 BRF – Brasil Foods S.A. Brazil Latin Food, Drink & Tobacco 12,947 42.6% 3.5% America55 Maxingvest AG Germany Europe Personal & Household 12,741 7.7% 5.8% Products56 Dr. August Oetker KG Germany Europe Food, Drink & Tobacco 12,558 18.9% n/a57 Kellogg Company United States North Food, Drink & Tobacco 12,397 -1.4% 10.0% America58 ConAgra Foods, Inc. United States North Food, Drink & Tobacco 12,303 1.9% 6.7% America59 Smithfield Foods, Inc. United States North Food, Drink & Tobacco 12,203 8.9% 4.3% America60 Dean Foods Company United States North Food, Drink & Tobacco 12,123 8.6% 0.7% America61 Asahi Breweries, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 12,054 3.2% 4.9%62 BSH Bosch und Siemens Hausgeräte Germany Europe Home Furnishings & 12,048 7.9% 5.1% GmbH Equipment63 Royal FrieslandCampina N.V. Netherlands Europe Food, Drink & Tobacco 11,914 10.0% 3.2%64 Nintendo Co., Ltd. Japan Asia/Pacific Leisure Goods 11,868 -29.3% 7.7%65 Vion N.V. Netherlands Europe Food, Drink & Tobacco 11,644 -2.4% 0.9%66 Nippon Meat Packers, Inc. Japan Asia/Pacific Food, Drink & Tobacco 11,575 3.7% 1.7%67 Motorola Mobility Holdings, Inc. United States North Electronic Products 11,460 3.7% -0.7% America68 Land O’Lakes, Inc. United States North Food, Drink & Tobacco 11,146 7.1% 1.6% America69 GD Midea Holding Co., Ltd. China Asia/Pacific Home Furnishings & 11,030 57.7% 5.4% Equipment70 Avon Products, Inc. United States North Personal & Household 10,731 4.3% 5.6% America Products71 H. J. Heinz Company United States North Food, Drink & Tobacco 10,707 2.0% 9.4% America72 Carlsberg A/S Denmark Europe Food, Drink & Tobacco 10,706 1.1% 9.9%73 Yamazaki Baking Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 10,601 4.8% 1.4%74 Uni-President Enterprises Corp. Taiwan Asia/Pacific Food, Drink & Tobacco 10,586 18.0% 4.9%75 Pernod Ricard S.A. France Europe Food, Drink & Tobacco 10,424 7.9% 14.1%n/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate Global Powers of the Consumer Products Industry 2012 17
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin76 Nikon Corporation Japan Asia/Pacific Electronic Products 10,384 13.0% 3.1%77 Dairy Farmers of America United States North Food, Drink & Tobacco 9,800 21.0% 0.4% America78 Grupo Bimbo, S.A.B. de C.V. Mexico Latin Food, Drink & Tobacco 9,284 0.7% 4.7% America79 Alticor Inc. United States North Personal & Household 9,200 9.5% n/a America Products80 Compagnie Financière Richemont SA Switzerland Europe Fashion Goods 9,120 33.2% 15.7%81 Marfrig Alimentos S.A. Brazil Latin Food, Drink & Tobacco 9,064 65.1% 0.9% America82 The Ferrero Group Italy Europe Food, Drink & Tobacco 9,041 4.0% n/a83 Coca-Cola Hellenic Bottling Company Greece Europe Food, Drink & Tobacco 9,021 3.8% 6.4% S.A.84 S.C. Johnson & Son, Inc. United States North Personal & Household 9,000 e 5.9% n/a America Products85 Gree Electric Appliances, Inc. of China Asia/Pacific Home Furnishings & 8,941 42.3% 7.1% Zhuhai Equipment86 The Estée Lauder Companies Inc. United States North Personal & Household 8,810 13.0% 8.0% America Products87 Arla Foods amba Denmark Europe Food, Drink & Tobacco 8,741 6.1% 2.6%88 Sara Lee Corporation United States North Food, Drink & Tobacco 8,681 -19.6% 14.9% America89 Reynolds American Inc. United States North Food, Drink & Tobacco 8,551 1.6% 13.0% America90 Stanley Black & Decker, Inc. United States North Home Improvement Products 8,410 125.0% 2.4% America91 Sony Ericsson Mobile Sweden Europe Electronic Products 8,358 -7.3% 1.6% Communications AB92 Danish Crown AmbA Denmark Europe Food, Drink & Tobacco 8,243 1.0% 3.6%93 Shiseido Company, Limited Japan Asia/Pacific Personal & Household 7,847 4.1% 2.3% Products94 Campbell Soup Company United States North Food, Drink & Tobacco 7,676 1.2% 11.0% America95 TCL Corporation China Asia/Pacific Electronic Products 7,668 17.0% 0.9%96 V.F. Corporation United States North Fashion Goods 7,625 6.7% 7.4% America97 Masco Corporation United States North Home Improvement Products 7,592 -2.6% -13.2% America98 MillerCoors LLC United States North Food, Drink & Tobacco 7,571 -0.0% 14.2% America99 Hormel Foods Corporation United States North Food, Drink & Tobacco 7,221 10.5% 5.5% America100 Eastman Kodak Company United States North Electronic Products 7,187 -5.5% -9.6% America101 Fortune Brands, Inc. United States North Home Improvement Products 7,142 6.7% 6.9% America102 Sumitomo Rubber Industries, Ltd. Japan Asia/Pacific Tires 6,904 15.3% 4.0%103 Dole Food Company, Inc. United States North Food, Drink & Tobacco 6,893 1.7% -0.4% America104 Morinaga Milk Industry Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 6,821 -0.4% 1.1%105 Grupo Modelo, S.A.B. de C.V. Mexico Latin Food, Drink & Tobacco 6,737 3.9% 18.4% America106 Coca-Cola Enterprises Inc. United States North Food, Drink & Tobacco 6,714 3.0% 9.3% America107 Tingyi (Cayman Islands) Holding Corp. China Asia/Pacific Food, Drink & Tobacco 6,681 31.5% 9.2%108 Mccain Foods Limited Canada North Food, Drink & Tobacco 6,494 e 0.0% n/a America109 Pirelli & C. S.p.A. Italy Europe Tires 6,438 8.7% 0.1%110 Lotte Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 6,196 12.4% 1.6%n/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate18
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin111 Sichuan Changhong Electric Co. Ltd China Asia/Pacific Electronic Products 6,171 32.6% 1.1%112 The Yokohama Rubber Co., Ltd. Japan Asia/Pacific Tires 6,081 11.4% 2.8%113 Jarden Corporation United States North Personal & Household 6,023 16.9% 1.8% America Products114 Charoen Pokphand Foods PCL Thailand Asia/Pacific Food, Drink & Tobacco 6,008 14.5% 7.2%115 Groupe Bigard S.A. France Europe Food, Drink & Tobacco 5,976e 0.0% n/a116 Saputo Inc. Canada North Food, Drink & Tobacco 5,930 3.7% 7.5% America117 Megmilk Snow Brand Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 5,899 28.2% 1.9%118 The Swatch Group Ltd. Switzerland Europe Fashion Goods 5,873 18.8% 17.7%119 Mattel, Inc. United States North Leisure Goods 5,856 7.8% 11.7% America120 National Beef Packing Company, LLC United States North Food, Drink & Tobacco 5,808 6.6% 4.3% America121 Nippon Suisan Kaisha, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 5,783 2.6% 0.0%122 Newell Rubbermaid Inc. United States North Personal & Household 5,759 3.3% 5.1% America Products123 Parmalat Group Italy Europe Food, Drink & Tobacco 5,711 8.5% 6.5%124 The Hershey Company United States North Food, Drink & Tobacco 5,671 7.0% 9.0% America125 Dr Pepper Snapple Group, Inc. United States North Food, Drink & Tobacco 5,636 1.9% 9.4% America126 Polo Ralph Lauren Corporation United States North Fashion Goods 5,482 14.3% 10.0% America127 San Miguel Corporation Philippines Asia/Pacific Food, Drink & Tobacco 5,478* 41.3% 9.8%128 Pioneer Corporation Japan Asia/Pacific Electronic Products 5,353 4.2% 2.4%129 Kewpie Corporation Japan Asia/Pacific Food, Drink & Tobacco 5,341 4.2% 2.6%130 Sodiaal Union France Europe Food, Drink & Tobacco 5,339 61.7% 0.6%131 Itoham Foods Inc. Japan Asia/Pacific Food, Drink & Tobacco 5,335 0.8% 0.1%132 Mohawk Industries, Inc. United States North Home Improvement Products 5,319 -0.5% 3.6% America133 B.&C.Tönnies Fleischwerk GmbH & Germany Europe Food, Drink & Tobacco 5,245e 1.3% n/a Co. KG134 The Clorox Company United States North Personal & Household 5,231 -5.5% 10.6% America Products135 Barilla Holding S.p.A. Italy Europe Food, Drink & Tobacco 5,183 -6.4% 0.7%136 Essilor International S.A. France Europe Personal & Household 5,168 19.1% 12.1% Products137 Groupe Terrena France Europe Food, Drink & Tobacco 5,140 11.1% 0.6%138 Nichirei Corporation Japan Asia/Pacific Food, Drink & Tobacco 5,122 -0.1% 0.9%139 Hankook Tire Co., Ltd. South Korea Asia/Pacific Tires 5,058 13.0% 8.2%140 Red Bull GmbH Austria Europe Food, Drink & Tobacco 5,026 15.9% n/a141 Nisshin Seifun Group Inc. Japan Asia/Pacific Food, Drink & Tobacco 4,963 -4.4% 3.6%142 CJ CheilJedang Corporation South Korea Asia/Pacific Food, Drink & Tobacco 4,932 13.5% 12.1%143 ITC Limited India Asia/Pacific Food, Drink & Tobacco 4,885 16.4% 22.0%144 Groupe SEB SA France Europe Home Furnishings & 4,849 15.0% 6.7% Equipment145 The J.M. Smucker Company United States North Food, Drink & Tobacco 4,826 4.8% 9.9% America146 Maple Leaf Foods Inc. Canada North Food, Drink & Tobacco 4,824 -4.9% 0.6% America147 Perdue Incorporated United States North Food, Drink & Tobacco 4,760 3.5% n/a America148 Bongrain SA France Europe Food, Drink & Tobacco 4,741 8.9% 2.6%149 Kohler Co. United States North Home Improvement Products 4,680 e 0.0% n/a America150 Arçelik A.Ş. Turkey Africa/ Home Furnishings & 4,612 5.2% 7.9% Middle East Equipmentn/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate Global Powers of the Consumer Products Industry 2012 19
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin151 Namco Bandai Holdings Inc. Japan Asia/Pacific Leisure Goods 4,612 4.1% 0.5%152 Husqvarna Group Sweden Europe Home Improvement Products 4,488 -5.4% 5.4%153 SanDisk Corporation United States North Electronic Products 4,463 41.5% 26.9% America154 Unicharm Corporation Japan Asia/Pacific Personal & Household 4,410 5.6% 9.8% Products155 Nissin Foods Holdings Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 4,387 1.0% 5.6%156 Yamaha Corporation Japan Asia/Pacific Leisure Goods 4,374 -9.9% 1.5%157 Hanesbrands Inc. United States North Fashion Goods 4,327 11.2% 4.9% America158 Levi Strauss & Co. United States North Fashion Goods 4,326 7.5% 3.4% America159 Bacardi Limited Bermuda Latin Food, Drink & Tobacco 4,300 e 0.0% n/a America160 Coca-Cola West Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 4,291 1.6% 2.0%161 Energizer Holdings, Inc. United States North Personal & Household 4,248 6.2% 9.5% America Products162 PT Indofood Sukses Makmur Tbk Indonesia Asia/Pacific Food, Drink & Tobacco 4,224 3.4% 10.2%163 Phillips-Van Heusen Corporation United States North Fashion Goods 4,220 103.8% 1.2% America164 ARYZTA AG Switzerland Europe Food, Drink & Tobacco 4,157 -6.3% 5.6%165 Ito En, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 4,150 5.6% 2.2%166 Coca-Cola Amatil Limited Australia Asia/Pacific Food, Drink & Tobacco 4,131 2.0% 10.8%167 Fraser and Neave, Limited Singapore Asia/Pacific Food, Drink & Tobacco 4,111** 6.8% 18.6%168 Hallmark Cards, Inc. United States North Leisure Goods 4,100 2.5% n/a America169 Lorillard, Inc. United States North Food, Drink & Tobacco 4,053 10.0% 25.4% America170 Ralcorp Holdings, Inc. United States North Food, Drink & Tobacco 4,049 4.0% 5.2% America171 Miele & Cie. KG Germany Europe Home Furnishings & 4,024 4.2% n/a Equipment172 Hasbro, Inc. United States North Leisure Goods 4,002 -1.6% 9.9% America173 Coty Inc. United States North Personal & Household 4,000 e 11.1% n/a America Products174 Casio Computer Co., Ltd. Japan Asia/Pacific Electronic Products 3,998 -20.2% 1.5%175 Ruchi Soya Industries Ltd. India Asia/Pacific Food, Drink & Tobacco 3,958 26.4% 1.2%176 Indesit Company Italy Europe Home Furnishings & 3,823 10.2% 3.1% Equipment177 La Coop fédérée Canada North Food, Drink & Tobacco 3,804 0.7% 0.5% America178 Lion Corporation Japan Asia/Pacific Personal & Household 3,781 2.8% 2.0% Products179 Premier Foods plc United Kingdom Europe Food, Drink & Tobacco 3,770 -8.4% -4.1%180 Controladora Mabe S.A. de C.V. Mexico Latin Home Furnishings & 3,720 e 20.0% n/a America Equipment181 GRUMA, S.A.B. de C.V. Mexico Latin Food, Drink & Tobacco 3,693 -7.7% 1.6% America182 The Schwan Food Company United States North Food, Drink & Tobacco 3,670 0.0% n/a America183 Del Monte Corporation (formerly Del United States North Food, Drink & Tobacco 3,666 -2.0% 3.2% Monte Foods Company) America184 Rolex SA Switzerland Europe Fashion Goods 3,654 e 11.8% n/a185 Puma AG Rudolf Dassler Sport Germany Europe Fashion Goods 3,594 10.0% 7.5%186 Jones Apparel Group, Inc. United States North Fashion Goods 3,594 9.6% 1.5% America187 Electronic Arts Inc. United States North Leisure Goods 3,589 -1.8% -7.7% American/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate20
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin188 Yakult Honsha Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 3,580 5.3% 5.3%189 Toyo Suisan Kaisha, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 3,579 -3.0% 4.3%190 World Co., Ltd. Japan Asia/Pacific Fashion Goods 3,575 -2.7% 0.0%191 The Nisshin OilliO Group, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 3,572 1.3% 1.0%192 D. Swarovski KG Austria Europe Fashion Goods 3,532 18.2% n/a193 Vestel Elektronik Sanayi ve Ticaret Turkey Africa/ Electronic Products 3,517 13.9% 0.8% A.Ş. Middle East194 Funai Electric Co., Ltd. Japan Asia/Pacific Electronic Products 3,462 -6.0% -0.3%195 Toyo Tire & Rubber Co., Ltd. Japan Asia/Pacific Tires 3,441 2.2% 0.3%196 E. & J. Gallo Winery United States North Food, Drink & Tobacco 3,400 e 13.3% n/a America197 Techtronic Industries Co. Ltd. Hong Kong Asia/Pacific Home Improvement Products 3,388 10.4% 2.8%198 L.D.C. SA France Europe Food, Drink & Tobacco 3,372 23.7% 1.9%199 Cooper Tire & Rubber Company United States North Tires 3,361 20.9% 4.9% America200 McCormick & Company, Inc. United States North Food, Drink & Tobacco 3,337 4.5% 11.1% America201 Citizen Holdings Co., Ltd. Japan Asia/Pacific Fashion Goods 3,334 12.9% 1.9%202 Constellation Brands, Inc. United States North Food, Drink & Tobacco 3,332 -1.0% 16.8% America203 Ezaki Glico Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 3,323 -0.2% 1.4%204 Kikkoman Corporation Japan Asia/Pacific Food, Drink & Tobacco 3,317 -0.8% 2.8%205 Molson Coors Brewing Company United States North Food, Drink & Tobacco 3,254 7.3% 21.8% America206 Yamae Hisano Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 3,228 4.6% 0.8%207 Chiquita Brands International, Inc. United States North Food, Drink & Tobacco 3,227 -7.0% 1.8% America208 Agropur Cooperative Canada North Food, Drink & Tobacco 3,223 9.5% 1.2% America209 Fromageries Bel S.A. France Europe Food, Drink & Tobacco 3,210 8.9% 4.9%210 Hermès International SCA France Europe Fashion Goods 3,188 25.4% 18.0%211 The Scotts Miracle-Gro Company United States North Home Improvement Products 3,140 -0.1% 6.5% America212 Sapporo Holdings Limited Japan Asia/Pacific Food, Drink & Tobacco 3,082 2.0% 4.0%213 Kumho Tire Co., Ltd. South Korea Asia/Pacific Tires 3,044 18.2% -1.1%214 Konami Corporation Japan Asia/Pacific Leisure Goods 3,018 -1.6% 4.9%215 KT&G Corporation South Korea Asia/Pacific Food, Drink & Tobacco 3,011 -4.5% 29.8%216 Société Coopérative Agricole et Agro- France Europe Food, Drink & Tobacco 3,002 4.1% 1.5% alimentaire AGRIAL217 JELD-WEN, Inc. United States North Home Improvement Products 3,000 e 20.0% n/a America218 Perfetti Van Melle S.p.A. Italy Europe Food, Drink & Tobacco 2,981 8.0% n/a219 Rich Products Corporation United States North Food, Drink & Tobacco 2,960e 2.1% n/a America220 Nippon Flour Mills Co., Ltd. Japan Asia/Pacific Food, Drink & Tobacco 2,950 -3.6% 2.4%221 Prima Meat Packers, Ltd. Japan Asia/Pacific Food, Drink & Tobacco 2,937 -0.6% 1.5%222 Natura Cosméticos S.A. Brazil Latin Personal & Household 2,932 21.1% 14.5% America Products223 Triskalia France Europe Food, Drink & Tobacco 2,921 ne n/a224 Ashley Furniture Industries, Inc. United States North Home Furnishings & 2,900 e 4.7% n/a America Equipment225 Vizio, Inc. United States North Electronic Products 2,900 e 17.3% n/a America226 Onward Holdings Co., Ltd. Japan Asia/Pacific Fashion Goods 2,834 -1.6% 1.2%227 Rinnai Corporation Japan Asia/Pacific Home Furnishings & 2,801 5.9% 6.8% Equipment228 Anadolu Efes Biracilik ve Malt Sanayii Turkey Africa/ Food, Drink & Tobacco 2,772* 9.4% 12.4% A.Ş. Middle Eastn/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate Global Powers of the Consumer Products Industry 2012 21
    • Top 250 consumer products companiesSales FY10 FY10 FY10rank net sales net sales net profitFY10 Company name Country of origin Region Product sector (US$mil) growth margin229 Armstrong World Industries, Inc. United States North Home Improvement Products 2,766 -0.5% 0.4% America230 Herbalife Ltd. United States North Food, Drink & Tobacco 2,734 17.6% 10.6% America231 Groupe Yves Rocher France Europe Personal & Household 2,730 e 2.8% n/a Products232 Nordmilch GmbH Germany Europe Food, Drink & Tobacco 2,718 11.8% 0.1%233 Rosen’s Diversified Inc. United States North Food, Drink & Tobacco 2,660e 6.0% n/a America234 Humana Group Germany Europe Food, Drink & Tobacco 2,656 18.1% 0.3%235 Videocon Industries Limited India Asia/Pacific Electronic Products 2,612e 14.2% n/a236 Bausch & Lomb Inc. United States North Personal & Household 2,600 e 4.0% n/a America Products237 Wimm-Bill-Dann Foods OJSC Russia Europe Food, Drink & Tobacco 2,600 19.2% n/a238 Tiger Brands Limited South Africa Africa/ Food, Drink & Tobacco 2,594 -5.5% 11.1% Middle East239 Church & Dwight Co., Inc. United States North Personal & Household 2,589 2.7% 10.5% America Products240 Brown-Forman Corporation United States North Food, Drink & Tobacco 2,586 4.7% 22.1% America241 Emmi AG Switzerland Europe Food, Drink & Tobacco 2,580 2.5% 3.9%242 Flowers Foods, Inc. United States North Food, Drink & Tobacco 2,574 -1.0% 5.3% America243 Spectrum Brands Holdings, Inc. United States North Personal & Household 2,567 15.1% -7.4% America Products244 Irish Dairy Board Co-operative Ireland Europe Food, Drink & Tobacco 2,560 5.7% 0.6% Limited245 Bakkavör Group ehf. Iceland Europe Food, Drink & Tobacco 2,541 -0.4% -0.8%246 Nortura SA Norway Europe Food, Drink & Tobacco 2,538 0.1% 1.3%247 House Foods Corporation Japan Asia/Pacific Food, Drink & Tobacco 2,536 -1.8% 2.4%248 Goodman Fielder Limited Australia Asia/Pacific Food, Drink & Tobacco 2,529 -3.9% -6.3%249 Liz Claiborne, Inc. United States North Fashion Goods 2,500 -17.0% -10.1% America250 Hostess Brands, Inc. United States North Food, Drink & Tobacco 2,500 e -2.3% n/a American/a = not available * Unable to determine if company’s reported sales exclude excise taxesne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxese = estimate22
    • Top 250 consumer products companies alphabetical listingAB Electrolux 47 Dr Pepper Snapple Group, Inc. 125 Kohler Co. 149 PT Indofood Sukses Makmur Tbk 162Acer Incorporated 33 Dr. August Oetker KG 56 Konami Corporation 214 Puma AG Rudolf Dassler Sport 185adidas AG 40 E. & J. Gallo Winery 196 Koninklijke Philips Electronics N.V. 15 Ralcorp Holdings, Inc. 170Agropur Cooperative 208 Eastman Kodak Company 100 Kraft Foods Inc. 10 Reckitt Benckiser Group plc 52Ajinomoto Co., Inc. 48 Electronic Arts Inc. 187 KT&G Corporation 215 Red Bull GmbH 140Alticor Inc. 79 Emmi AG 241 Kumho Tire Co., Ltd. 213 Research In Motion Limited 34Altria Group, Inc. 39 Energizer Holdings, Inc. 161 L.D.C. SA 198 Reynolds American Inc. 89Anadolu Efes Biracilik ve Malt 228 Essilor International S.A. 136 La Coop fédérée 177 Rich Products Corporation 219Sanayii A.Ş. Estée Lauder Companies Inc. 86 Land O’Lakes, Inc. 68 Rinnai Corporation 227Anheuser-Busch InBev SA/NV 12 Ezaki Glico Co., Ltd. 203 Lenovo Group Limited 27 Rolex SA 184Apple Inc. 6 Ferrero Group 82 Levi Strauss & Co. 158 Rosen’s Diversified Inc. 233Arçelik A.Ş. 150 Flowers Foods, Inc. 242 LG Electronics Inc. 11 Royal FrieslandCampina N.V. 63Arla Foods amba 87 Fomento Económico Mexicano, 51 Lion Corporation 178 Ruchi Soya Industries Ltd. 175Armstrong World Industries, Inc. 229 S.A.B. de C.V. (FEMSA) Liz Claiborne, Inc. 249 S.C. Johnson & Son, Inc. 84ARYZTA AG 164 Fortune Brands, Inc. 101 L’Oreal SA 22 SABMiller plc 44Asahi Breweries, Ltd. 61 Fraser and Neave, Limited 167 Lorillard, Inc. 169 Samsung Electronics Co., Ltd. 1Ashley Furniture Industries, Inc. 224 Fromageries Bel S.A. 209 Lotte Co., Ltd. 110 San Miguel Corporation 127Avon Products, Inc. 70 Funai Electric Co., Ltd. 194 Maple Leaf Foods Inc. 146 SanDisk Corporation 153B.&C.Tönnies Fleischwerk GmbH 133 GD Midea Holding Co., Ltd. 69 Marfrig Alimentos S.A. 81 Sapporo Holdings Limited 212& Co. KG General Mills, Inc. 46 Mars, Incorporated 18 Saputo Inc. 116Bacardi Limited 159 Goodman Fielder Limited 248 Masco Corporation 97 Sara Lee Corporation 88Bakkavör Group ehf. 245 Goodyear Tire & Rubber Company 37 Mattel, Inc. 119 Schwan Food Company 182Barilla Holding S.p.A. 135 Gree Electric Appliances, Inc. of 85 Maxingvest AG 55 Scotts Miracle-Gro Company 211Bausch & Lomb Inc. 236 Zhuhai Mccain Foods Limited 108 Sharp Corporation 13Bongrain SA 148 Groupe Bigard S.A. 115 McCormick & Company, Inc. 200 Shiseido Company, Limited 93BRF Brasil Foods S.A. 54 Groupe Lactalis 50 Megmilk Snow Brand Co., Ltd. 117 Sichuan Changhong Electric 111Bridgestone Corporation 16 Groupe SEB SA 144 Meiji Holdings Co., Ltd. 53 Co. LtdBritish American Tobacco plc 25 Groupe Terrena 137 Miele & Cie. KG 171 Smithfield Foods, Inc. 59Brown-Forman Corporation 240 Groupe Yves Rocher 231 MillerCoors LLC 98 Société Coopérative Agricole et 216BSH Bosch und Siemens 62 GRUMA, S.A.B. de C.V. 181 Mohawk Industries, Inc. 132 Agro-alimentaire AGRIALHausgeräte GmbH Grupo Bimbo, S.A.B. de C.V. 78 Molson Coors Brewing Company 205 Sodiaal Union 130Campbell Soup Company 94 Grupo Modelo, S.A.B. de C.V. 105 Morinaga Milk Industry Co., Ltd. 104 Sony Corporation 5Cargill Meat Solutions 45 H. J. Heinz Company 71 Motorola Mobility Holdings, Inc. 67 Sony Ericsson Mobile 91Corporation Haier Group 31 Namco Bandai Holdings Inc. 151 Communications ABCarlsberg A/S 72 Hallmark Cards, Inc. 168 National Beef Packing Company, 120 Spectrum Brands Holdings, Inc. 243Casio Computer Co., Ltd. 174 Hanesbrands Inc. 157 LLC Stanley Black & Decker, Inc. 90Charoen Pokphand Foods PCL 114 Hankook Tire Co., Ltd. 139 Natura Cosméticos S.A. 222 Sumitomo Rubber Industries, Ltd. 102Chiquita Brands International, Inc. 207 Hasbro, Inc. 172 Nestlé S.A. 2 Suntory Holdings Limited 35Church & Dwight Co., Inc. 239 Heineken N.V. 28 Newell Rubbermaid Inc. 122 Svenska Cellulosa AB SCA 43Citizen Holdings Co., Ltd. 201 Henkel AG & Co. KGaA 32 Nichirei Corporation 138 Swatch Group Ltd. 118CJ CheilJedang Corporation 142 Herbalife Ltd. 230 NIKE, Inc. 30 TCL Corporation 95Clorox Company 134 Hermès International SCA 210 Nikon Corporation 76 Techtronic Industries Co. Ltd. 197Coca-Cola Amatil Limited 166 Hershey Company 124 Nintendo Co., Ltd. 64 Tiger Brands Limited 238Coca-Cola Company 14 Hormel Foods Corporation 99 Nippon Flour Mills Co., Ltd. 220 Tingyi (Cayman Islands) Holding 107Coca-Cola Enterprises Inc. 106 Hostess Brands, Inc. 250 Nippon Meat Packers, Inc. 66 Corp.Coca-Cola Hellenic Bottling 83 House Foods Corporation 247 Nippon Suisan Kaisha, Ltd. 121 Toyo Suisan Kaisha, Ltd. 189Company S.A. Humana Group 234 Nisshin OilliO Group, Ltd. 191 Toyo Tire & Rubber Co., Ltd. 195Coca-Cola West Co., Ltd. 160 Husqvarna Group 152 Nisshin Seifun Group Inc. 141 Triskalia 223Colgate-Palmolive Company 42 Imperial Tobacco Group PLC 24 Nissin Foods Holdings Co., Ltd. 155 Tyson Foods, Inc. 20Compagnie Financière 80 Indesit Company 176 Nokia Corporation 9 Unicharm Corporation 154Richemont SA Irish Dairy Board Co-operative 244 Unilever Group 7 Nordmilch GmbH 232Compagnie Générale des 23 Limited Nortura SA 246 Uni-President Enterprises Corp. 74Établissements Michelin S.C.A. ITC Limited 143 Onward Holdings Co., Ltd. 226 V.F. Corporation 96ConAgra Foods, Inc. 58 Ito En, Ltd. 165 Panasonic Corporation 3 Vestel Elektronik Sanayi ve 193Constellation Brands, Inc. 202 Itoham Foods Inc. 131 Parmalat Group 123 Ticaret A.Ş.Controladora Mabe S.A. de C.V. 180 J.M. Smucker Company 145 PepsiCo, Inc. 8 Videocon Industries Limited 235Cooper Tire & Rubber Company 199 Japan Tobacco Inc. 19 Perdue Incorporated 147 Vion N.V. 65Coty Inc. 173 Jarden Corporation 113 Perfetti Van Melle S.p.A. 218 Vizio, Inc. 225D. Swarovski KG 192 JBS S.A. 17 Pernod Ricard S.A. 75 Whirlpool Corporation 38Dairy Farmers of America 77 JELD-WEN, Inc. 217 Philip Morris International Inc. 21 Wimm-Bill-Dann Foods OJSC 237Danish Crown AmbA 92 Jones Apparel Group, Inc. 186 Phillips-Van Heusen Corporation 163 World Co., Ltd. 190Danone 26 Kao Corporation 49 Pioneer Corporation 128 Yakult Honsha Co., Ltd. 188Dean Foods Company 60 Kellogg Company 57 Pirelli & C. S.p.A. 109 Yamae Hisano Co., Ltd. 206Del Monte Corporation (formerly 183 Kewpie Corporation 129 Polo Ralph Lauren Corporation 126 Yamaha Corporation 156Del Monte Foods Company) Kikkoman Corporation 204 Premier Foods plc 179 Yamazaki Baking Co., Ltd. 73Diageo plc 41 Kimberly-Clark Corporation 36 Prima Meat Packers, Ltd. 221 Yokohama Rubber Co., Ltd. 112Dole Food Company, Inc. 103 Kirin Holdings Company, Limited 29 Procter & Gamble Company 4 Global Powers of the Consumer Products Industry 2012 23
    • Global Top 10 consumer products companies, 2010 2010 2010 2010 2010 2010 2010 sales net sales net sales net profit asset return on rank Company name Country Product sector (US$mil) growth* margin** turnover** assets** 1 Samsung South Korea Electronic Products 134,528 11.2% 10.4% 1.2 12.0% Electronics 2 Nestlé Switzerland Food, Drink & Tobacco 105,492 2.0% 32.2% 1.0 31.7% 3 Panasonic Japan Electronic Products 101,704 17.2% 1.0% 1.1 1.1% 4 Procter & United States Personal & Household Products 82,559 4.6% 14.3% 0.6 8.5% Gamble 5 Sony Japan Electronic Products 73,761 0.2% -3.1% 0.6 -1.7% 6 Apple United States Electronic Products 65,225 52.0% 21.5% 0.9 18.6% 7 Unilever Netherlands Food, Drink & Tobacco 58,775 11.1% 10.4% 1.1 11.2% and United Kingdom 8 PepsiCo United States Food, Drink & Tobacco 57,838 33.8% 11.0% 0.8 9.3% 9 Nokia Finland Electronic Products 56,364 3.6% 3.2% 1.1 3.4% 10 Kraft Foods United States Food, Drink & Tobacco 49,207 21.8% 8.4% 0.5 4.3% Top 10 $785,454 12.7% 11.4% 0.8 9.5% Top 250 $2,823,002 8.4% 8.5% 0.9 7.5% Economic concentration of Top 10 27.8%Source: Published company data* Top 10 and Top 250 sales growth figures are sales-weighted, currency-adjusted composites** Top 10 and Top 250 figures are sales-weighted composites Electronics and food/drink/tobacco companies Growing 52 percent in one year, Apple ascended the dominate Top 10 ranks from twelfth place to sixth in 2010. Unilever and The 10 largest consumer products companies PepsiCo each rose one place in the top 10 ranking, outperformed the Top 250 as a whole in 2010 with bumping Nokia from seventh to ninth. Acquisitions double-digit sales growth and profitability. As a result, continue to propel both companies. In 2010, the top 10’s share of total Top 250 sales rose one Unilever acquired Sara Lee’s Personal Care business, percentage point in 2010 to 27.8 percent. Despite and in 2011, the company acquired Alberto-Culver. slightly lower asset turnover compared with the Top Nevertheless, Pepsi will likely outrank Unilever in the 250, the leader group’s better profitability translated future following several recent acquisitions of its own. into considerably higher return on assets. In 2010, the company acquired majority stakes in its two largest bottlers, PepsiAmericas and the Pepsi Headed by South Korea’s Samsung Electronics, the Bottling Group. In 2011, it completed the acquisition first five companies on the list remained the same as of Russia’s Wimm-Bill-Dann Foods. in 2009. However, number three-ranked Panasonic narrowed the gap with second-place Nestlé. P&G, Meanwhile, Kraft Foods remained in tenth place, the fourth largest consumer products company in while LG Electronics dropped out of the top 10 into the world, is the only company among the top 10 eleventh place following a 24 percent sales decline that is neither an electronics maker nor primarily a that is attributable primarily to lagging cell phone manufacturer of food or beverages. sales.24
    • Global Powers of the Consumer Products Performance by region/country, 2010Industry geographical analysisFor purposes of geographical analysis, companies Average 2010 2010 net 2010 2010 Number of size net sales profit asset return onare assigned to a region based on their headquarters companies (US$mil) growth* margin** turnover** assets**location, which may not coincide with where they Africa/ME 4 $3,374 6.2% 7.6% 1.0 7.9%derive the majority of their sales. Although many Asia/Pac 77 $12,004 5.9% 3.7% 1.0 3.7%companies derive sales from outside their region, Japan 52 $10,985 4.4% 1.6% 0.9 1.5%100 percent of each company’s sales are accounted Europe 66 $12,492 7.0% 11.7% 0.8 9.2%for in that company’s region. Five regions are used foranalysis: France 17 $8,594 15.2% 8.1% 0.8 6.6% Germany 10 $9,155 11.2% 5.6% 1.0 5.8%• Africa/Middle East UK 7 $21,857 6.6% 14.0% 0.6 8.8%• Asia/Pacific Latin 10 $9,744 22.2% 6.9% 0.9 6.5%• Europe America• Latin America North 93 $10,358 10.9% 11.0% 0.8 9.4% America• North America US 87 $10,565 10.8% 11.0% 0.8 9.2%Growth accelerates for French, German companies Top 250 250 $11,292 8.4% 8.5% 0.9 7.5%in an otherwise subdued EuropeLatin America continued to lead the regions in top-line Source: Published company data * Sales-weighted, currency-adjusted composite growth ratessales growth. At 22.2 percent, composite sales for ** Sales-weighted compositesthe companies based in this region grew more than2.5 times faster than the Top 250 group as a whole in2010. As a result, Latin America continued to gain in Share of Top 250 companies by country/region, 2010stature among the Top 250 as reflected by a growing 2.4% 1.6%share of companies and sales. However, profitabilitycontinued to lag the larger group. The region addedtwo companies in 2010 for a total of 10 Top 250 20.8%companies. Marfrig Alimentos and Natura Cosméticos,both based in Brazil, make a total of four Braziliancompanies. Five of the companies in this region hail 34.8%from Mexico. 10.0%While Brazil gained two companies, the UK lost twoin 2010. Cadbury, one of the largest confectionery 6.8%companies in the world, was acquired by Kraft Foods. 4% 12.8% 4%Dairy Crest, the UK’s leading dairy foods company, fellout of the Top 250 following a modest sales decline. 2.8%Although the UK’s share of Top 250 companies and Africa/ME Japan Other Asia/Pac France GermanyTop 250 sales both dropped, the average size of the UK Other Europe Latin America US CanadaUK companies increased to nearly $22 billion, morethan $10 billion larger than the average Top 250consumer products company.The UK has the dubious distinction of being the onlygeographic area tracked in this study to experiencedecelerating sales growth in 2010. In 2009, its robust9.5 percent increase in sales stood out in a sea ofmostly negative growth numbers. In 2010, however,the country’s composite sales growth cooled to 6.6percent, while growth rebounded in the other regionsand countries. Global Powers of the Consumer Products Industry 2012 25
    • The UK’s relatively modest advance in sales Share of Top 250 sales by country/region, 2010contributed to below-average 7.0 percent composite 1.6% 0.5%growth for Europe as a whole. A marked improvementover the prior year’s negative result, it nevertheless fellshort compared with the North American and Latin 20.2%American regions. Although composite growth forEuropean companies was moderate, that was not the 32.6%case for France and Germany. These two countriesexperienced huge swings in top-line performance. 12.5%For Germany, composite sales growth jumped from-5.4 percent in 2009 to 11.2 percent in 2010.For France, the change was equally notable: from 5.2% 3.5%-0.9 percent to 15.2 percent. 15.4% 5.4% 3.2%Despite more modest sales growth, Europeanconsumer products companies recorded the highest Africa/ME Japan Other Asia/Pac France Germanycomposite net profit margin of all five regions – UK Other Europe Latin America US Canada11.7 percent – assisted by the UK’s industry-leading14 percent profit margin. It should be noted, however,that Nestlé’s 32 percent net profit margin in 2010 Companies in the Asia/Pacific region – particularlyhad a disproportionate impact on the region’s overall those based in Japan – did not recover as strongly asresult. Nestle’s bottom line was given a significant the others. Composite net sales grew 5.9 percent inboost from one-time net income of discontinued 2010 (4.4 percent for Japan). The region’s 3.7 percentoperations (Alcon) of $24.5 billion. Excluding Nestlé, net profit margin was the lowest among the fiveEurope’s composite net profit margin and return regions, restrained by the Japanese companies’on assets drop to 8.4 percent and 6.4 percent, 1.6 percent result. Japan accounted for two-thirdsrespectively, slightly below the Top 250 as a whole. (52 of 77) of all Top 250 companies based in the Asia/ Pacific region, so it had a disproportionate impact onThe 93 North American consumer products companies the region’s results.also experienced a big rebound in composite sales,growing nearly 11 percent in 2010 from -3.2 percent Three companies based in Turkey and one in Southin 2009. On a regional basis, this group outperformed Africa comprised the Africa/Middle East region. Thesethe others on the bottom line – including Europe, if companies are relatively small – less than one-thirdNestlé is factored out of the region’s result. the size of the average Top 250 company.26
    • Top consumer products companies by region Top 10 European consumer products companies, 2010Among the European consumer products companies, Top 2010six of the top 10 operate in the food, drink, and Europe 250 net sales Company name rank rank Product sector Country (US$mil)tobacco sector. Nestlé maintained its first place Nestlé 1 2 Food, Drink & Tobacco Switzerland 105,492ranking despite weak sales growth in 2010. Double- Unilever 2 7 Food, Drink & Tobacco Netherlands 58,775digit growth propelled Unilever ahead of Nokia and Unitedto become the second-largest consumer products Kingdomcompany in the region. Michelin jumped from tenth Nokia 3 9 Electronic Products Finland 56,364place to seventh. Despite these changes in the AB InBev 4 12 Food, Drink & Tobacco Belgium 36,297ranking, the top 10 names remained the same as in Philips 5 15 Personal & Household Netherlands 33,7542009. Products L’Oreal 6 22 Personal & Household France 25,888 ProductsA similar scenario played out in the North American Michelin 7 23 Tires France 23,757region where P&G remained the undisputed consumer Imperial 8 24 Food, Drink & Tobacco United 23,415products leader. However, Apple beat out PepsiCo Tobacco Kingdomfor second place. As noted above, the technology BAT 9 25 Food, Drink & Tobacco United 23,014giant enjoyed heady growth in 2010, with more than Kingdomhalf its sales coming from outside the United States. Danone 10 26 Food, Drink & Tobacco France 22,587Meanwhile, Kraft Foods fell to fourth place. Top10 newcomers NIKE and Research In Motion (RIM) Top 10 North American consumer products companies, 2010displaced Coca-Cola Enterprises (CCE) and Kimberly- North Top 2010 netClark. CCE, the third-largest Coca-Cola bottler in the Company America 250 salesworld, sold its North American operations to The name rank rank Product sector Country (US$mil)Coca-Cola Company (TCCC) in 2010 and acquired Procter & 1 4 Personal & Household United States 82,559 Gamble ProductsTCCC’s bottling operations in Norway and Sweden. Apple 2 6 Electronic Products United States 65,225RIM, which grew by one-third in 2010, became the PepsiCo 3 8 Food, Drink & Tobacco United States 57,838first Canadian company to join the North American Kraft Foods 4 10 Food, Drink & Tobacco United States 49,207top 10. Coca-Cola 5 14 Food, Drink & Tobacco United States 35,119 Mars 6 18 Food, Drink & Tobacco United States 30,000eSix of the top 10 Asia/Pacific consumer products Tyson Foods 7 20 Food, Drink & Tobacco United States 28,430companies, including the top 5, are manufacturers Philip Morris 8 21 Food, Drink & Tobacco United States 27,208of electronic products. A 30 percent jump in sales in International2010 pushed Hong Kong-based Lenovo Group onto NIKE 9 30 Fashion Goods United States 20,862the region’s leader board for the first time, landing Research In 10 34 Electronic Products Canada 19,907in eighth place. As a result, Taiwan’s Acer Inc. fell off Motionthe list. This was the only change to the Asia/Pacifictop 10. Top 10 Asia/Pacific consumer products companies, 2010 Asia/ Top 2010 Pacific 250 net sales Company name rank rank Product sector Country (US$mil) Samsung 1 1 Electronic Products South Korea 134,528 Panasonic 2 3 Electronic Products Japan 101,704 Sony 3 5 Electronic Products Japan 73,761 LG 4 11 Electronic Products South Korea 48,506 Sharp 5 13 Electronic Products Japan 35,357 Bridgestone 6 16 Tires Japan 32,680 Japan Tobacco 7 19 Food, Drink & Tobacco Japan 29,088 Lenovo 8 27 Electronic Products Hong Kong 21,594 Kirin 9 29 Food, Drink & Tobacco Japan 20,959 Haier 10 31 Home Furnishings & China 20,075 Equipment e = estimate Source: Published company data Global Powers of the Consumer Products Industry 2012 27
    • Latin America had 10 companies among the Top Top 10 Latin American consumer products companies, 2010250 in 2010, up two from the prior year with the Latin Top 2010 netaddition of Brazil’s Marfrig Alimentos, which operates Company America 250 sales name rank rank Product sector Country (US$mil)primarily in the meat sector, and Natura Cosméticos, a JBS 1 17 Food, Drink & Tobacco Brazil 31,426maker of cosmetics and fragrances. All of the region’s FEMSA 2 51 Food, Drink & Tobacco Mexico 13,342companies except for Natura and Mabe operate as BRF – Brasil 3 54 Food, Drink & Tobacco Brazil 12,947either food processors or beverage makers. Foods Grupo Bimbo 4 78 Food, Drink & Tobacco Mexico 9,284There were no changes among the companies that Marfrig 5 81 Food, Drink & Tobacco Brazil 9,064comprised the Africa/Middle East region. However, all Grupo Modelo 6 105 Food, Drink & Tobacco Mexico 6,737four moved up in the Top 250 ranking in 2010. Bacardi 7 159 Food, Drink & Tobacco Bermuda 4,300e Mabe 8 180 Home Furnishings & Mexico 3,720 e Equipment Gruma 9 181 Food, Drink & Tobacco Mexico 3,693 Natura 10 222 Personal & Household Brazil 2,932 Cosméticos Products Top Africa/Middle East consumer products companies, 2010 Africa/ Top 2010 net ME 250 sales Company name rank rank Product sector Country (US$mil) Arçelik 1 150 Home Furnishings & Turkey 4,612 Equipment Vestel 2 193 Electronic Products Turkey 3,517 Anadolu Efes* 3 228 Food, Drink & Tobacco Turkey 2,772* Tiger Brands 4 238 Food, Drink & Tobacco South Africa 2,594 e = estimate Source: Published company data * Unable to determine if company’s reported sales exclude excise taxes28
    • Global Powers of the Consumer Products Performance by product sector, 2010Industry product sector analysisFor analytical purposes, the Top 250 companies have Average 2010 2010 2010 2010 Number of size net sales net profit asset return onbeen organized into eight major product sectors: companies (US$mil) growth* margin** turnover** assets** Electronic 23 $28,454 9.9% 5.3% 1.0 5.5%• Electronic products products• Fashion goods Fashion 18 $5,976 14.2% 7.6% 1.1 8.0%• Food, drink, and tobacco goods• Home furnishings and equipment Food, drink 140 $9,986 7.6% 10.9% 0.8 8.9%• Home improvement products & tobacco• Leisure goods Home 13 $8,615 12.6% 5.0% 1.2 6.2% furnishings• Personal and household products &• Tires equipment Home 10 $4,992 12.3% 1.0% 0.8 0.8%Fashion goods and tire sectors rally improvement productsAt 14.2 percent, the fashion goods sector posted thestrongest composite sales growth in 2010 – a huge Leisure 8 $5,177 -10.1% 5.2% 0.8 4.3% goodsturnaround from a 5.3 percent drop in sales in 2009. Personal & 28 $12,503 6.4% 9.8% 0.8 7.7%Liz Claiborne, the only company in this group to suffer householda significant sales decline, continues to rationalize productsits brand portfolio and has shifted its channel focus Tires 10 $10,960 14.1% 3.1% 1.0 3.2%from primarily serving department stores to become Top 250 250 $11,292 8.4% 8.5% 0.9 7.5%a direct-to-consumer business. Among othertransactions, in November 2011, the company sold Source: Published company datathe trademark rights to its namesake Liz Claiborne * Sales-weighted, currency-adjusted composite growth rates ** Sales-weighted compositesbrand to J.C. Penney. In 2012, the company willchange its name to Fifth & Pacific Companies to bettercommunicate its strategic focus on growing its threeglobal lifestyle brands (Juicy Couture, Kate Spade, andLucky Brand).In line with a rebound in auto sales, all 10 tiremanufacturers participated in that sector’s 2010 salescomeback, with eight experiencing a double-digitincrease. In 2009, eight tire companies saw salesdecline. The group also returned to profitability in2010 following two years of composite losses.Despite relatively modest 6.4 percent sales growthin 2010, the personal and household productssector remained one of the most profitable witha composite net profit margin of 9.8 percent. Thecompanies in this group tend to be large, secondonly to the electronics sector in average sales volume.The average size of this group was given a boost in2010 with the reclassification of Philips Electronics asa household products company to reflect its focus onhealthcare, lifestyle, and lighting products. Global Powers of the Consumer Products Industry 2012 29
    • The food, drink, and tobacco sector, the largest of Share of Top 250 companies by product sector, 2010the eight product groups, saw its share of Top 250 4.0%companies and Top 250 sales decline for the first timein the five years that Deloitte has been tracking the 9.2%global powers of the consumer products industry. 11.2% 7.2%This group, the only sector to eke out any growth at 3.2%all in 2009, generated below-average sales growth 4.0%in 2010 – 7.6 percent versus 8.4 percent for the Top250. Personal and household products, the other 5.2%fast-moving consumer goods sector, was the onlymajor product group to grow at a slower pace.Nevertheless, food, drink, and tobacco companiesoutperformed the other product sectors on thebottom line with a robust 10.9 percent composite net 56.0%profit margin. Electronic products Fashion goods Food, drink & tobaccoWithin the food, drink, and tobacco sector, food Home furnishings & equipt. Home improvement products Leisure goodsprocessors experienced a strong rebound in sales Personal & hshld. products Tiresto 9.2 percent from -1.5 percent in 2009. On theother hand, sales growth slowed significantly for thetobacco companies to 3.3 percent in 2010 from Share of Top 250 sales by product sector, 20108.2 percent the year before. Nevertheless, they 3.9%continued to be highly profitable, as did the beveragemakers. 12.4% 23.2%The composite net profit margin nearly doubled 1.5%in 2010 for manufacturers of electronic products, 1.8%historically one of the lowest-margin sectors. 4.0%Although many companies in this sector continued 3.8%to operate within a 1-3 percent range, Samsung,Apple, RIM, and SanDisk all boasted double-digitprofitability. Composite sales for the group advanceda solid 9.9 percent. 49.5%Composite sales rose 12.6 percent for the homefurnishings and equipment sector. However, this result Electronic products Fashion goods Food, drink & tobaccois not necessarily reflective of the fortunes of many Home furnishings & equipt. Home improvement products Leisure goodsof the individual companies. Total sales for the group Personal & hshld. products Tireswere given a boost primarily by GD Midea and Gree,both Chinese manufacturers of home appliances. Food, drink & tobacco: performance by subsector, 2010The home improvement products sector generatedthe biggest turnaround in composite sales of all the Average FY10 FY10 FY10 FY10product groups in 2010. Composite sales were down Number of size net sales net profit asset return on companies (US$mil) growth* margin** turnover** assets**more than 13 percent in 2009, but recovered to plus12.3 percent in 2010. However, the merged sales of Beverages 30 $10,115 4.7% 14.4% 0.5 7.4%Stanley Works and Black & Decker to form Stanley Food 101 $9,450 9.2% 8.7% 1.1 9.4% processingBlack & Decker in March 2010 was mostly responsible Tobacco 9 $15,569 3.3% 17.5% 0.6 10.4%for the increase. Food, drink 140 $9,986 7.6% 10.9% 0.8 8.9% & tobaccoThe leisure goods sector was the lone exception tothe consumer products industry’s 2010 sales rally. Source: Published company dataFive of the eight Top 250 leisure goods companies * Sales-weighted, currency-adjusted composite growth ratessuffered declining sales. In particular, Japanese ** Sales-weighted compositesgaming giant Nintendo continued to stumble amidheightened competition.30
    • Top consumer products companies by product Top 10 electronic products companies, 2010sector Product Top FY10Samsung, Panasonic, and Sony remained in the sector 250 net sales Company name rank rank Country Region (US$mil)top three spots among the electronic products Samsung 1 1 South Korea Asia/Pacific 134,528companies. The rest continued to jockey for position, Panasonic 2 3 Japan Asia/Pacific 101,704with Apple moving into fourth place ahead of Nokia Sony 3 5 Japan Asia/Pacific 73,761and LG. Philips, number seven on the list last year, Apple 4 6 United States North America 65,225was reclassified to the personal and household Nokia 5 9 Finland Europe 56,364products sector as noted above. This made room LG 6 11 South Korea Asia/Pacific 48,506for Research In Motion (RIM) to join the top 10 Sharp 7 13 Japan Asia/Pacific 35,357electronics companies for the first time. The company Lenovo 8 27 Hong Kong Asia/Pacific 21,594has grown in leaps and bounds since its Blackberry Acer 9 33 Taiwan Asia/Pacific 19,973device evolved into a global wireless data platform. Research In 10 34 Canada North America 19,907In fiscal 2006, RIM ranked 199th among the Top 250. MotionIn fiscal 2010, it had moved up to 34th place overalland became the world’s tenth largest electronicscompany. Top 10 fashion goods companies, 2010 Product Top FY10The United States and Switzerland dominate the sector 250 net salesfashion goods leader board, accounting for nine Company name rank rank Country Region (US$mil)of the top 10 companies. There were no changes NIKE 1 30 United States North America 20,862among the first four companies in 2010, with Nike, adidas 2 40 Germany Europe 15,921the world’s top maker of athletic footwear and Richemont 3 80 Switzerland Europe 9,120apparel, still in the lead over rival adidas. Swatch and VF 4 96 United States North America 7,625Polo Ralph Lauren traded places, as did Hanesbrands Swatch 5 118 Switzerland Europe 5,873and Levi Strauss. Phillips-Van Heusen joined the Top Polo Ralph 6 126 United States North America 5,482250 for the first time with the acquisition of Tommy LaurenHilfiger in May 2010, coming aboard as the ninth Hanesbrands 7 157 United States North America 4,327largest fashion company. Rolex displaced both Puma Levi Strauss 8 158 United States North America 4,326and World Co., taking the number ten spot. Phillips-Van 9 163 United States North America 4,220 Heusen Rolex 10 184 Switzerland Europe 3,654 e e = estimate Source: Published company data Global Powers of the Consumer Products Industry 2012 31
    • In the food, drink, and tobacco sector, the six largest Top 10 food, drink & tobacco companies, 2010companies remained the same in 2010 as in 2009, Product Top FY10with Nestlé topping the chart. Brazil’s JBS moved sector 250 net sales Company name rank rank Country Region (US$mil)into the top 10 for the first time at number seven. Nestlé 1 2 Switzerland Europe 105,492The company acquired a majority stake in Pilgrim’s Unilever 2 7 Netherlands Europe 58,775Pride in December 2009; also in December 2009, JBS and Unitedmerged with Bertin, a Brazilian company and one Kingdomof the largest beef exporters in Latin America. As a PepsiCo 3 8 United States North America 57,838result, JBS rose from number 103 in fiscal 2007 to Kraft Foods 4 10 United States North America 49,207number 17 overall in fiscal 2010. This knocked Philip AB InBev 5 12 Belgium Europe 36,297Morris International out of the top 10. Coca-Cola 6 14 United States North America 35,119 JBS 7 17 Brazil Latin America 31,426The top 10 home furnishings and equipment Mars 8 18 United States North America 30,000 ecompanies remained fixed in position in 2010. Japan Tobacco 9 19 Japan Asia/Pacific 29,088All 10 are manufacturers of household appliances. Tyson Foods 10 20 United States North America 28,430Three are based in China, including top-rankedHaier. Top 10 home furnishings & equipment companies, 2010In 2010, there were a total of 10 home improvement Product Top FY10companies among the Top 250 manufacturers of sector 250 net salesconsumer products. As noted above, Black & Decker Company name rank rank Country Region (US$mil) Haier 1 31 China Asia/Pacific 20,075became a wholly owned subsidiary of Stanley Works. Whirlpool 2 38 United States North America 18,366The name of the combined company was changed Electrolux 3 47 Sweden Europe 14,803to Stanley Black & Decker. As a result of the merger, BSH 4 62 Germany Europe 12,048Black & Decker moved from the being the fourth Midea 5 69 China Asia/Pacific 11,030largest manufacturer of home improvement products Gree 6 85 China Asia/Pacific 8,941to becoming part of the world’s largest home SEB 7 144 France Europe 4,849improvement company. Otherwise, this sector’s top Arçelik 8 150 Turkey Africa/Middle 4,61210 ranking was fairly stable except for minor changes Eastamong the bottom four companies. Eight of the top Miele 9 171 Germany Europe 4,02410 home improvement companies are based in the Indesit 10 176 Italy Europe 3,823United States. Top 10 home improvement products companies, 2010 Product Top FY10 sector 250 net sales Company name rank rank Country Region (US$mil) Stanley Black & 1 90 United States North America 8,410 Decker Masco 2 97 United States North America 7,592 Fortune Brands 3 101 United States North America 7,142 Mohawk 4 132 United States North America 5,319 Kohler 5 149 United States North America 4,680 e Husqvarna 6 152 Sweden Europe 4,488 TTI (Techtronic 7 197 Hong Kong Asia/Pacific 3,388 Industries) Scotts Miracle- 8 211 United States North America 3,140 Gro JELD-WEN 9 217 United States North America 3,000 e Armstrong 10 229 United States North America 2,766 e = estimate Source: Published company data32
    • The eight Top 250 leisure goods companies are Top leisure goods companies, 2010still dominated by Japan’s Nintendo, despite the Product Top FY10company’s 29 percent plunge in 2010 sales on top sector 250 net sales Company name rank rank Country Region (US$mil)of a 22 percent sales decline in 2009. There were a Nintendo 1 64 Japan Asia/Pacific 11,868couple changes in the ranking in the middle of the Mattel 2 119 United States North America 5,856list: Namco Bandai overtook Yamaha, and Hallmark Namco Bandai 3 151 Japan Asia/Pacific 4,612moved ahead of Hasbro. All eight leisure goods Yamaha 4 156 Japan Asia/Pacific 4,374companies are based in Japan or the United States. Hallmark 5 168 United States North America 4,100 Hasbro 6 172 United States North America 4,002The personal and household products top 10 Electronic Arts 7 187 United States North America 3,589is quite an international group with companies Konami 8 214 Japan Asia/Pacific 3,018headquartered in seven countries. As noted above,in 2010, Philips Electronics was moved out of theelectronics sector to join this group as the second-largest manufacturer of personal and household Top 10 personal & household products companies, 2010products. As the rest of the top 10 moved down to Product Top FY10 sector 250 net salesaccommodate Philips, Avon fell off the list. Company name rank rank Country Region (US$mil) Procter & 1 4 United States North America 82,559The Asia/Pacific region accounts for six of the 10 GambleTop 250 tire manufacturers. The only change in Philips 2 15 Netherlands Europe 33,754this sector in 2010 is that Japan’s Sumitomo Rubber L’Oreal 3 22 France Europe 25,888overtook Italy’s Pirelli as the fourth largest company. Henkel 4 32 Germany Europe 20,041With the exception of Pirelli, all of the tire companies Kimberly-Clark 5 36 United States North America 19,746moved up in the overall Top 250 ranking in 2010. Colgate- 6 42 United States North America 15,564 Palmolive SCA 7 43 Sweden Europe 15,195 Kao 8 49 Japan Asia/Pacific 13,886 Reckitt 9 52 United Europe 13,071 Benckiser Kingdom Maxingvest 10 55 Germany Europe 12,741 Top 10 tire companies, 2010 Product Top FY10 sector 250 net sales Company name rank rank Country Region (US$mil) Bridgestone 1 16 Japan Asia/Pacific 32,680 Michelin 2 23 France Europe 23,757 Goodyear 3 37 United States North America 18,832 Sumitomo 4 102 Japan Asia/Pacific 6,904 Rubber Pirelli 5 109 Italy Europe 6,438 Yokohama 6 112 Japan Asia/Pacific 6,081 Rubber Hankook Tire 7 139 South Korea Asia/Pacific 5,058 Toyo Tire & 8 195 Japan Asia/Pacific 3,441 Rubber Cooper Tire & 9 199 United States North America 3,361 Rubber Kumho Tires 10 213 South Korea Asia/Pacific 3,044 e = estimate Source: Published company data Global Powers of the Consumer Products Industry 2012 33
    • Consumer Products Top 250 newcomers, 2010 Top 250 rank Name of company Country of origin Dominant format 67 Motorola Mobility Holdings, Inc. United States Electronic Products 81 Marfrig Alimentos S.A. Brazil Food, Drink & Tobacco 90 Stanley Black & Decker, Inc. United States Home Improvement Products 163 Phillips-Van Heusen Corporation United States Fashion Goods 222 Natura Cosméticos S.A. Brazil Personal & Household Products 223 Triskalia France Food, Drink & Tobacco 233 Rosen’s Diversified Inc. United States Food, Drink & Tobacco 235 Videocon Industries Limited India Electronic Products 237 Wimm-Bill-Dann Foods OJSC Russia Food, Drink & Tobacco 241 Emmi AG Switzerland Food, Drink & Tobacco 243 Spectrum Brands Holdings, Inc. United States Personal & Household Products Top 250 newcomers Aggressive organic growth contributed to double- Eight companies joined the ranks of the Top 250 for digit sales increases for India’s Videocon Industries, the first time in 2010, while three other companies Brazil’s Natura Cosméticos, and Russia’s Wimm-Bill- made a return visit. Landing in the top 100 were Dann Foods. Rosen’s Diversified, a U.S.-based meat Motorola Mobility (split from Motorola Inc., now processor, and Emmi, a Swiss dairy foods processor, Motorola Solutions), Marfrig Alimentos (acquisition), complete the list of newcomers. and Stanley Black & Decker (merger). Phillips-Van Heusen made the list through the acquisition of The recognition as a member of the Top 250 will be Tommy Hilfiger. Triskalia, a new France-based food short-lived for two of these companies: Wimm-Bill- and meat processing company, was formed in 2010 Dann was acquired by PepsiCo in February 2011, and through the merger of three French agricultural Motorola Mobility has signed a definitive agreement cooperatives: Coopagri Bretagne, Cam 56, and to be acquired by Google. Union Eolys. Spectrum Brands rejoined the Top 250 following its merger with small appliance maker Russell Hobbs in June 2010.34
    • 50 fastest growing consumer products companies, 2010FY10 FY10 FY10 FY10 FY10growth Top 250 net sales net sales net profitrank sales rank Company name Country Product sector (US$mil) growth margin 1 90 Stanley Black & Decker, Inc. United States Home Improvement Products 8,410 125.0% 2.4% 2 163 Phillips-Van Heusen United States Fashion Goods 4,220 103.8% 1.2% Corporation 3 81 Marfrig Alimentos S.A. Brazil Food, Drink & Tobacco 9,064 65.1% 0.9% 4 130 Sodiaal Union France Food, Drink & Tobacco 5,339 61.7% 0.6% 5 17 JBS S.A. Brazil Food, Drink & Tobacco 31,426 60.5% -0.5% 6 69 GD Midea Holding Co., Ltd. China Home Furnishings & 11,030 57.7% 5.4% Equipment 7 6 Apple Inc. United States Electronic Products 65,225 52.0% 21.5% 8 54 BRF – Brasil Foods S.A. Brazil Food, Drink & Tobacco 12,947 42.6% 3.5% 9 85 Gree Electric Appliances, Inc. China Home Furnishings & 8,941 42.3% 7.1% of Zhuhai Equipment 10 153 SanDisk Corporation United States Electronic Products 4,463 41.5% 26.9% 11 127 San Miguel Corporation Philippines Food, Drink & Tobacco 5,478* 41.3% 9.8% 12 8 PepsiCo, Inc. United States Food, Drink & Tobacco 57,838 33.8% 11.0% 13 80 Compagnie Financière Switzerland Fashion Goods 9,120 33.2% 15.7% Richemont SA 14 34 Research In Motion Limited Canada Electronic Products 19,907 33.1% 17.1% 15 111 Sichuan Changhong Electric China Electronic Products 6,171 32.6% 1.1% Co. LtdFastest 50 The fastest 50 were more representative of theMerger and acquisition activity heated up in 2010 consumer products industry as a whole in 2010in the consumer products industry compared with than they were in 2009 when 43 of the companiesa lean year in 2009 (see M&A drivers in consumer operated in either the food, drink, and tobaccoproducts sector remain strong beginning on sector (34) or the electronic products sector (9).page 38). Fifteen of the 50 fastest-growing consumer A rising tide lifted at least most boats in 2010, asproducts companies, or 30 percent, were involved all but one of the eight major product sectors arein a significant acquisition in 2010 (defined as a deal represented. Only the leisure goods sector is absentvalued at $100+ million), many of which have been from the list of fastest-growing companies in 2010.noted throughout this report. This includes 10 of thetop 20 fastest-growing companies, demonstrating Not surprisingly, from a geographic perspective,the importance of acquisitions as a major driver of one-third of the companies (17 of 50) are fromgrowth. In addition, several others made a number emerging markets. The BRIC countries, in particular,of smaller acquisitions. Growth was also driven by are well represented. Of the 14 Top 250 BRIC-basedstrong brands, product innovation, and increased companies, 12 appear among the fastest 50.demand for consumer goods in emerging markets.All of these factors contributed to a compositegrowth rate of nearly 30 percent for the fastest 50.These companies grew 3.5 times faster than the Top250 as a whole in 2010 (29.2 percent composite netsales growth vs. 8.4 percent), but they were not asprofitable (7.1 percent composite net profit marginvs. 8.5 percent). Indicative of an improving, albeitfragile, global economic environment, sales for thefastest 50 grew at a much more rapid rate in 2010compared with 2009 when composite sales for thegroup rose 18.2 percent. Global Powers of the Consumer Products Industry 2012 35
    • FY10 FY10 FY10 FY10 FY10growth Top 250 net sales net sales net profitrank sales rank Company name Country Product sector (US$mil) growth margin 16 107 Tingyi (Cayman Islands) Holding China Food, Drink & Tobacco 6,681 31.5% 9.2% Corp. 17 27 Lenovo Group Limited Hong Kong Electronic Products 21,594 30.0% 1.3% 18 117 Megmilk Snow Brand Co., Ltd. Japan Food, Drink & Tobacco 5,899 28.2% 1.9% 19 175 Ruchi Soya Industries Ltd. India Food, Drink & Tobacco 3,958 26.4% 1.2% 20 210 Hermès International SCA France Fashion Goods 3,188 25.4% 18.0% 21 198 L.D.C. SA France Food, Drink & Tobacco 3,372 23.7% 1.9% 22 50 Groupe Lactalis France Food, Drink & Tobacco 13,810 22.4% 3.0% 23 10 Kraft Foods Inc. United States Food, Drink & Tobacco 49,207 21.8% 8.4% 24 222 Natura Cosméticos S.A. Brazil Personal & Household 2,932 21.1% 14.5% Products 25 77 Dairy Farmers of America United States Food, Drink & Tobacco 9,800 21.0% 0.4% 26 199 Cooper Tire & Rubber Company United States Tires 3,361 20.9% 4.9% 27 23 Compagnie Générale des France Tires 23,757 20.8% 5.9% Établissements Michelin S.C.A. 28 180 Controladora Mabe S.A. de C.V. Mexico Home Furnishings & 3,720e 20.0% n/a Equipment 29 217 JELD-WEN, Inc. United States Home Improvement Products 3,000e 20.0% n/a 30 237 Wimm-Bill-Dann Foods OJSC Russia Food, Drink & Tobacco 2,600 19.2% n/a 31 136 Essilor International S.A. France Personal & Household 5,168 19.1% 12.1% Products 32 56 Dr. August Oetker KG Germany Food, Drink & Tobacco 12,558 18.9% n/a 33 118 The Swatch Group Ltd. Switzerland Fashion Goods 5,873 18.8% 17.7% 34 192 Swarovski AG Austria Fashion Goods 3,532 18.2% n/a 35 213 Kumho Tire Co., Ltd. South Korea Tires 3,044 18.2% -1.1% 36 234 Humana Group Germany Food, Drink & Tobacco 2,656 18.1% 0.3% 37 74 Uni-President Enterprises Corp. Taiwan Food, Drink & Tobacco 10,586 18.0% 4.9% 38 230 Herbalife Ltd. United States Food, Drink & Tobacco 2,734 17.6% 10.6% 39 225 Vizio, Inc. United States Electronic Products 2,900e 17.3% n/a 40 3 Panasonic Corporation Japan Electronic Products 101,704 17.2% 1.0% 41 95 TCL Corporation China Electronic Products 7,668 17.0% 0.9% 42 113 Jarden Corporation United States Personal & Household 6,023 16.9% 1.8% Products 43 143 ITC Limited India Food, Drink & Tobacco 4,885 16.4% 22.0% 44 140 Red Bull GmbH Austria Food, Drink & Tobacco 5,026 15.9% n/a 45 37 The Goodyear Tire & Rubber United States Tires 18,832 15.5% -0.9% Company 46 40 adidas AG Germany Fashion Goods 15,921 15.5% 4.7% 47 102 Sumitomo Rubber Industries, Japan Tires 6,904 15.3% 4.0% Ltd. 48 243 Spectrum Brands Holdings, Inc. United States Personal & Household 2,567 15.1% -7.4% Products 49 144 Groupe SEB SA France Home Furnishings & 4,849 15.0% 6.7% Equipment 50 114 Charoen Pokphand Foods PCL Thailand Food, Drink & Tobacco 6,008 14.5% 7.2% Fastest 50** 29.2% 7.1% Top 250** 8.4% 8.5%Source: Published company data* Unable to determine if company’s reported sales exclude excise taxes** Group growth rates are sales-weighted, currency-adjusted composites; Group profit margins are sales-weighted composites36
    • Study methodology and data sources Group financial resultsTo be considered for this list, a company must first This report uses sales-weighted composites ratherhave been designated as a manufacturer (primary than simple arithmetic averages as the primarySIC code 20-39). Each company was then analyzed measure for understanding group financial results.in an attempt to determine if the majority of its fiscal Therefore, results of larger companies contribute2010 sales were derived from consumer products more to the composite than do results of smallerversus commercial or industrial products. Broadly companies. Because the data have been converteddefined, these are products produced for and to U.S. dollars for ranking purposes and to facilitatepurchased by the ultimate consumer. Generally, these comparison among groups, composite growth ratesproducts are marketed under well-known consumer also have been adjusted to correct for currencybrands. We have excluded contract manufacturers – movement. While these composite results generallyorganizations that make products under contract for behave in a similar fashion to arithmetic averages,other companies – and included only the companies they provide better representative values forwhose brands are on the final products. We also benchmarking purposes.have excluded motor vehicles, as this industry is notrelevant to the vast majority of the target audience Composites and averages for each group were basedfor this analysis. only on companies with data. Not all data elements were available for all companies.Companies whose primary business was the saleof consumer products were included among the It should also be noted that the financial informationTop 250 based on their total fiscal 2010 net sales, used for each company in a given year was accuratewhich may include sales of commercial and industrial as of the date the financial report was originallyproducts as well as consumer products. Excise taxes issued. Although a company may have restated prior-were excluded from the sales of tobacco and drinks year results to reflect a change in its operations or ascompanies. Our fiscal 2010 definition encompasses a result of an accounting change, such restatementsfiscal years ended through June 2011. are not reflected in this data. This study is not an accounting report. It is intended to provide anA number of sources were consulted to develop the accurate reflection of market dynamics and theirTop 250 list including Hoovers, Factiva, OneSource, impact on the structure of the consumer productsAmadeus, and Forbes Largest Private Companies list. industry over a period of time. As a result of theseThe principal data sources for financial information factors, growth rates for individual companies maywere annual reports, SEC filings, and information not correspond to other published results.found in companies’ press releases, fact sheets, orwebsites. If company-issued information was notavailable, other public-domain sources were used,including trade journal estimates, industry analystreports, and various business information databases.In order to provide a common base from which torank the companies, net sales for non-U.S. companieswere converted to U.S. dollars. Exchange rates,therefore, have an impact on the results. OANDA.com was the source used for the exchange rates.The average daily exchange rate corresponding toeach company’s fiscal year was used to convert thatcompany’s results to U.S. dollars. Individual companygrowth rates and other financial ratios, however,were calculated in the company’s local currency. Global Powers of the Consumer Products Industry 2012 37
    • M&A drivers in consumer products sector remainstrong Consumer products M&A activity and trends According to data from mergermarket.com, an Over the past two years, the consumer products independent M&A intelligence tool, the total number industry has recovered from its 2008-2009 slump. of deals completed by consumer products companies Sales and earnings have been remarkably robust increased to 1083 in 2010 from 945 in 2009 when despite continuing macro-economic uncertainty the M&A market turned down. Transactions with a generated by the Eurozone crisis, U.S. deficit concerns, value of $100 million or more rose even more rapidly. and political upheaval in the Middle East – not to The number of these larger deals surged 41 percent mention declining incomes, high unemployment, compared with 2009. The recovery in the volume weak housing market activity, and price-conscious of acquisitions in the consumer products industry consumers and suppliers. Many consumer products continued through the first half of 2011. companies have been adept at managing costs and conserving cash, resulting in strong balance sheets. As a result, merger and acquisition activity began to rebound in the fourth quarter of 2009. Merger & acquisition activity by consumer products companies, 2001-2011 Total Average Average # deals value of value of Total value value with disclosed- disclosed- # deals with # deals of deals of deals Total # disclosed value deals value deals undisclosed with value $100+ mil $100+ mil deals value (US$mil) (US$ mil) value $100+ mil (US$mil) (US$mil) 2011 1067 540 $145,799 $270 527 187 $135,272 $723 2010 1083 557 $174,415 $313 526 174 $161,955 $931 2009 945 468 $179,598 $384 477 123 $169,832 $1,381 2008 1229 685 $252,760 $369 544 207 $237,739 $1,148 2007 1331 830 $222,900 $269 501 258 $206,091 $799 2006 1286 812 $134,516 $166 474 201 $116,810 $581 2005 1111 695 $205,648 $296 416 196 $191,654 $978 2004 926 521 $94,776 $182 405 144 $84,351 $586 2003 695 441 $138,690 $314 254 114 $128,869 $1,130 2002 560 383 $76,578 $200 177 124 $68,137 $549 2001 530 406 $123,282 $304 124 126 $113,934 $904 Results reflect deals completed during the calendar year by consumer products companies; acquired companies may be in any industry Source: mergermarket.com; accessed March 13, 201238
    • Merger & acquisition activity by consumer products companies, Q1 2008 – Q4 2011 400 110 100 350 90 300 80 250 70 Value (US$bil)# deals 60 200 50 150 40 30 100 20 50 10 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 # deals with disclosed value # deals with undisclosed value Total value of disclosed-value deals (US$bil)Results reflect deals completed during the calendar year by consumer products companies; acquired companies may be inany industrySource: mergermarket.com; accessed March 13, 2012Although activity levels were up, deal values M&A drivers in consumer products industrywere not. Financial markets remain volatile, and While respondents to recent Deloitte surveys indicatecompanies’ appetite for risk has fallen. A decrease lower expectations for M&A activity in the near-term,in the risk appetite of buyers means that sellers three main trends will continue to drive deals in thehave had to concede some ground in their pricing consumer products sector in the longer run:expectations to ensure successful deal completions. • International expansion (particularly into emergingFor all deals where the value was disclosed the markets).average deal value fell from $384 million in 2009to $313 million in 2010 and further to $270 million • arket consolidation to strengthen market share Min 2011. The average value of $100+ million deals and achieve further economies of scale.dropped even faster, to $931 million in 2010 from adecade-high $1,381 million in 2009. The downward • Portfolio rationalization/non-core divestments.trend continued in 2011 to $723 million. The ongoingeconomic uncertainty suggests the decrease invaluations will likely continue in 2012. Global Powers of the Consumer Products Industry 2012 39
    • For the Top 250 and other large consumer products Top acquisitions predominantly in fast-moving companies, the search for growth will be a consumer goods sectors compelling, ongoing driver for mergers, acquisitions, In 2011, 33 deals with values in excess of and joint venture activity. However, many $500 million were completed by consumer products companies with cash resources face the challenge companies. Of these deals, 17 had values in excess of of diminished organic growth opportunities in their $1 billion. traditional markets. Increasingly, companies are seeking to establish footprints in higher-growth The food, drink and tobacco sector continues to see emerging markets. Notably, attractive high-growth a relatively high volume of M&A activity compared opportunities extend well beyond the much- to most other consumer products sectors. Food and publicized BRIC markets as evidenced by: drinks companies acquiring other food and drinks companies or brands accounted for 18 of the 33 • Heineken’s brewery acquisitions in Ethiopia. largest deals. The largest transaction in 2011 was SABMiller’s $12.9 billion acquisition of Australia’s • Electrolux’s foray into Chile. Foster’s Group. • Turkish investments by both Diageo and SABMiller. Many of the larger beverage companies have been active in gaining a foothold in high-growth markets • British American Tobacco’s investment in Colombia. or building on an existing presence. PepsiCo’s acquisition of Wimm-Bill-Dann now makes it the In more developed markets, strategic moves that largest beverage business in Russia. It also provides strengthen market share and realize economies PepsiCo with a solid entry point into the fast-growing of scale are driving M&A activity. Key players are Central and Eastern European markets. Similarly, acquiring businesses that allow them to build scale in Diageo’s acquisition of Mey Icki not only provides particular regions and achieve category leadership in it with ownership of Turkey’s largest Raki (Turkish core product areas. Unilever’s acquisition of Alberto- liquor) producer, but also with a platform to access Culver, for example, bolsters its leadership position Turkey’s increasingly affluent middle class with in the hair care and skin care markets. LVMH’s Diageo’s international portfolio of spirits brands. acquisition of Bulgari will help the French luxury goods company consolidate its position in the Meanwhile, SABMiller has transferred its Russian high-end accessories market. and Ukrainian beer businesses to Anadolu Efes, Turkey’s largest brewer, in return for a 24 percent In addition, M&A activity will continue to be driven shareholding. As a result of the strategic alliance, by the disposal of non-core assets as a result of which was completed in March 2012, Anadolu Efes portfolio rationalization or, in some cases, to satisfy will develop SABMiller’s international brands in anti-trust concerns, such as the divestitures required Turkey, Russia, the CIS, Central Asia, and the by Unilever’s acquisition of Alberto-Culver. Large Middle East. companies with available cash reserves or ready access to funding are also taking advantage of Deal activity has been more sporadic in the tobacco opportunities arising from other companies’ financial sector, which is already highly consolidated. British distress. Some M&A activity will continue to be American Tobacco’s purchase of Colombia’s driven by over-leveraged companies’ divestment of Protabaco for $452 million (completed in October non-core brands, or even flagship brands. 2011) is the largest tobacco transaction in the past two years. Unilever was the most active company in the personal and household products sector in 2011. It completed the acquisition of Alberto-Culver in May 2011 and commenced some of the related anti-trust- driven and non-core disposals.40
    • Top deals* by consumer products companies, 2011 Acquired Deal Buyer Buyer Acquired business/Parent business Acquired business Deal value Rank Buyer location product sector company location product sector (US$mil) 1 SABMiller plc UK Food, Drink & Foster’s Group Limited Australia Food, Drink & $12,925 Tobacco Tobacco 2 PepsiCo, Inc. United Food, Drink & Wimm-Bill-Dann Foods OJSC Russia Food, Drink & $6,127 States Tobacco (66% stake) Tobacco 3 LVMH Moet France Fashion Goods Bulgari S.p.A. Italy Fashion Goods $5,406 Hennessy Louis Vuitton SA 4 Groupe Lactalis France Food, Drink & Parmalat S.p.A. Italy Food, Drink & $4,700 Tobacco (71.03% stake) Tobacco 5 Unilever Group UK Food, Drink & Alberto-Culver Co. United States Personal & $3,595 Tobacco Household Products 6 Kirin Holdings Japan Food, Drink & Schincariol Participacoes e Brazil Food, Drink & $2,553 Company, Limited Tobacco Representacoes SA (50.45% Tobacco stake) 7 Cargill Inc. United Food, Drink & Provimi Holding B.V. Netherlands Food, Drink & $2,167 States Tobacco Tobacco 8 Diageo plc UK Food, Drink & Mey Icki Sanayii ve Tic AS Turkey Food, Drink & $2,106 Tobacco Tobacco 9 Embotelladoras Mexico Food, Drink & Grupo Continental, S.A.B. Mexico Food, Drink & $2,099 Arca SA de CV Tobacco Tobacco 10 Nordmilch AG Germany Food, Drink & Humana Milchunion eG Germany Food, Drink & $2,045 Tobacco Tobacco 11 V.F. Corporation United Fashion Goods The Timberland Company United States Fashion Goods $1,961 States 12 Nestlé S.A. Switzerland Food, Drink & Hsu Fu Chi International Ltd. China Food, Drink & $1,700 Tobacco (60% stake) Tobacco 13 Jinro Co., Ltd. South Korea Food, Drink & Hite Brewery Co., Ltd. South Korea Food, Drink & $1,453 Tobacco Tobacco 14 Asahi Group Japan Food, Drink & Flavoured Beverages Group New Zealand Food, Drink & $1,270 Holdings, Ltd. Tobacco Holdings Limited Tobacco 15 Fila Korea Ltd. and South Korea Fashion Goods Acushnet Company/Fortune United States Leisure Goods $1,255 a consortium of Brands bidders 16 General Mills, Inc. United Food, Drink & Yoplait S.A.S. (51% stake) and France Food, Drink & $1,154 States Tobacco Yoplait Marques S.A.S. (50% Tobacco stake)/PAI Partners and Sodiaal 17 Stanley Black & United Home Improvement Niscayah Group AB Sweden Industrial Products & $1,131 Decker, Inc. States Products Services 18 Colgate-Palmolive United Personal & Sanex brand/Unilever Plc UK Personal & $947 Company States Household Products Household Products 19 Boparan Holdings UK Food, Drink & Northern Foods plc UK Food, Drink & $909 Limited Tobacco Tobacco 20 Unilever Group UK Food, Drink & OJSC Concern Kalina (82% Russia Personal & $838 Tobacco stake) Household Products 21 Labelux Group Austria Fashion Goods Jimmy Choo Ltd. UK Fashion Goods $812 GmbH 22 Coca-Cola FEMSA Mexico Food, Drink & Grupo Tampico (Beverage Mexico Food, Drink & $783 SAB de CV Tobacco Division) Tobacco 23 Lenovo Group Hong Kong Electronic Products Medion AG (52% stake) Germany Consumer $726 Limited Electronics Retailer Global Powers of the Consumer Products Industry 2012 41
    • AcquiredDeal Buyer Buyer Acquired business/Parent business Acquired business Deal valueRank Buyer location product sector company location product sector (US$mil) 24 H. J. Heinz United Food, Drink & Coniexpress SA Industrias Brazil Food, Drink & $723 Company States Tobacco Alimenticias (80% stake) Tobacco 25 Reckitt Benckiser UK Personal & Paras Pharmaceuticals Ltd. India Personal & $720 Group plc Household Products Household Products 26 Grupo Bimbo SA Mexico Food, Drink & North American Fresh Bakery United States Food, Drink & $709 de CV Tobacco business/Sara Lee Corp. Tobacco 27 Sodiaal Union France Food, Drink & Groupe Entremont Alliance/ France Food, Drink & $642 Tobacco Unifem Tobacco 28 PPR SA France Fashion Goods Volcom Inc. United States Fashion Goods $608 29 Société France Fashion Goods Piper-Heidsieck-Compagnie France Food, Drink & $593 Européenne de Champenoise/Rémy Cointreau Tobacco Participations Industrielles (EPI) S.A.S. 30 TOMY Company, Japan Leisure Goods RC2 Corporation United States Leisure Goods $585 Ltd. 31 AB Electrolux Sweden Home Furnishings & Olympic Group Financial Egypt Home Furnishings & $565 Equipment Investment Company S.A.E Equipment 32 AB Electrolux Sweden Home Furnishings & Compania Tecno Industrial S.A. Chile Home Furnishings & $563 Equipment Equipment 33 Ralcorp Holdings, United Food, Drink & North American refrigerated United States Food, Drink & $545 Inc. States Tobacco dough business/Sara Lee Corp. Tobacco* Acquisitions by consumer products companies with deal values of $500+ million completed in 2011Company names in bold are 2010 Global Powers of the Consumer Products Industry Top 250 companiesSource: mergermarket.com and company reports In June, it disposed of Sanex, the personal hygiene These new geographies may also lead to an increase in business, to Colgate-Palmolive in an innovative deal the number of joint ventures either with local players – where Unilever simultaneously acquired Colgate- potentially through regulatory necessity – or with other Palmolive’s Colombian detergent business. The financial buyers to share risk and pool expertise. company continued its acquisition spree in December, acquiring an 82 percent stake in Concern Kalina The need to manage costs downward and (a Russian beauty company), thereby significantly productivity upward is a strong driver for further strengthening its position in the Russian market. consolidation in the consumer products industry, promoting M&A activity motivated by scale. M&A outlook Companies will pursue deals that allow them to Despite the fragile economic backdrop, underlying achieve category leadership positions in developed M&A drivers in the consumer products industry markets by intensifying, broadening, or filling in remain strong. Inorganic growth strategies will most their product portfolios. At the same time, portfolio likely continue to find favor in the absence of realistic rationalization will result in the divestment of organic growth potential, but companies will be non-core brands in low-growth segments and highly discerning in how they invest their money. geographies. And there will continue to be some opportunities for distressed deals. Going forward, companies based in mature markets like Western Europe, the United States, and Japan For more information on M&A activity and trends will continue to seek opportunities in high-growth in the consumer products sector, see “The Deloitte geographies in order to counter slow-growing or Consumer Products M&A Survey: Stick or Twist?” stagnant consumption at home. published December 2011.42
    • Q ratio analysisThis report ranks the world’s largest consumer products suppliers The antidote to commoditization is to differentiate through betterby revenue. Yet the size of a company, although interesting, customer experience and innovation, and to communicate thisdoes not tell us anything about future performance. Large size differentiation to consumers through good brand management.merely shows that a company performed well in the past and Consequently, a high Q ratio suggests that the financial marketshas, therefore, achieved critical scale. In addition, the market believe a company is doing the right things to succeed in a businesscapitalization of a publicly traded consumer products company, environment characterized by commoditization. A Q ratio less thanexamined alone, says something about past performance – even if one may indicate that the financial markets believe a company isn’tonly recently – but not necessarily about the future. using its physical assets in a profitable manner.However, examining financial information to draw inferencesabout future performance can, to a limited extent, be useful. Top 30 consumer products companies by Q ratioWith that in mind, this report has provided an analysis of the Hermès International SCA 9.66Q ratio of consumer products companies for the last four years Apple Inc. 6.12to find out how financial markets are evaluating the future ITC Limited 6.03prospects of the world’s largest publicly traded consumer products Herbalife Ltd. 5.55companies. In particular, the Q ratio helps us to infer whether Natura Cosméticos S.A. 5.45companies are strong in such areas as brand, differentiation, and Lorillard, Inc. 5.02innovation. Philip Morris International Inc. 3.99What is the Q ratio? Colgate-Palmolive Company 3.95The Q ratio is the ratio of a publicly traded company’s market Tiger Brands Limited 3.66capitalization to the value of its tangible assets. If this ratio is The Estée Lauder Companies Inc. 3.49greater than one, it means that financial market participants assign Tingyi (Cayman Islands) Holding Corp. 3.32a positive value to a company’s non-tangible assets such as brand NIKE, Inc. 3.26equity, differentiation, innovation, customer experience, market Polo Ralph Lauren Corporation 3.19dominance, customer loyalty, and skillful execution. The higher the Brown-Forman Corporation 3.15Q ratio, the greater share of a company’s value that stems from The Hershey Company 3.14such intangibles. A Q ratio of less than one, on the other hand, Compagnie Financière Richemont SA 2.60indicates failure to generate value on the basis of intangible assets. The Swatch Group Ltd. 2.43It indicates that the financial markets view a consumer products V.F. Corporation 2.41company’s strategy as unable to generate a sufficient return onphysical assets. Indeed, it suggests an arbitrage opportunity. Essilor International S.A. 2.32That is, if a company’s Q ratio is less than one, a company could, Church & Dwight Co., Inc. 2.30theoretically, be purchased through equity markets and the Saputo Inc. 2.23tangible assets could then be sold at a profit. British American Tobacco plc 2.20 Charoen Pokphand Foods PCL 2.19Why should we care about the Q ratio? Grupo Modelo, S.A.B. de C.V. 2.16In recent years, one of the biggest challenges facing consumer The Coca-Cola Company 2.12products companies has been the squeezing of margins due The Clorox Company 2.11to commoditization. That is, consumers often view the brands LOreal SA 2.04produced by these companies as undifferentiated from one another Mattel, Inc. 2.01except on the basis of price. This trend has been exacerbated as Anadolu Efes Biracilik ve Malt Sanayii A.Ş. 2.00more consumers use the Internet to compare prices and products.Commoditization causes intense price competition and tends to McCormick & Company, Inc. 1.96drive down prices and, therefore, margins. Only the lowest costleaders in any product segment can compete primarily on the basisof price. All others must do something else. Global Powers of the Consumer Products Industry 2012 43
    • What do the numbers show? Top 30 consumer products companies by countryThis year the Q ratio was calculated for 189 publicly traded India 2.61consumer products companies, compared with 186 companies lastyear, and 190 the previous year. The composite Q ratio (calculated US 1.80by taking the sum of all companies’ market capitalization and Switzerland 1.68dividing by the sum of all companies’ asset values) is 1.200, UK 1.58compared with1.205 last year, and 1.068 and 0.800 in the Mexico 1.50two prior years respectively. France 1.36 Germany 1.12Here are some of the highlights of the analysis: Netherlands 1.11The companies with the highest Q ratios come from a mix of South Korea 1.02industries, but all possess strong brands. First on the list for the Turkey 1.01second year is Hermes, the French luxury company. This is followed, China (excl HK) 0.98once again, by U.S.- based Apple, the technology company whose Canada 0.92products are not only innovative but have a strong fashion element Brazil 0.91– one explanation of their strong brand identity. Apple also appears Sweden 0.59as a retailer in the 2012 Global Powers of Retailing report, where Italy 0.55it similarly ranks high in the Q ratio ranking. Next on the list are a Japan 0.43collection of tobacco, food, and personal care companies.The relatively high Q ratio that characterizes these companies reflectsfinancial market confidence in their future ability to generate profits By regionbased on strong brands. Yet a high Q ratio is no guarantee of future North America 1.78success, and no company should ever rest on its laurels – the bottom Africa/Middle East 1.41of the list of 189 companies (which is not included in this publication) Europe 1.22includes many familiar names that once dominated their industries, Latin America 1.04only to be eclipsed by innovative upstarts. Asia Pacific 0.61• Composite Q ratios were calculated by country and region. Developed markets 1.20 Country composite Q ratios were calculated only if a country had Emerging markets 1.10 more than three publicly traded companies in the top 250 list. The country with the highest composite Q ratio is India followed by the U.S. As was the case last year, the country with the lowest By primary product sector 2012 2011 2010 2009 Q ratio is Japan followed by Italy. Strong Q ratios are found in Fashion goods 2.26 2.16 1.02 0.58 France, Germany, Mexico, Switzerland, and the UK. The composite Personal & household 1.34 1.55 1.50 1.25 Q ratio for companies based in emerging markets is only slightly Food, drink, tobacco 1.24 1.22 1.13 0.90 below that of companies based in developed markets. Electronic products 1.09 1.06 0.90 0.57 Leisure goods 1.03 1.48 1.53 1.87• Composite Q ratios were also calculated based on a company’s Home improvement 0.75 0.77 0.81 0.49 primary product sector. Not surprisingly, the industry with Home furnishings 0.69 0.82 0.59 0.25 the highest composite Q ratio is fashion goods, an industry in Tires 0.47 0.45 0.42 0.27 which success usually requires strong brand identity. The other industries with relatively high composite Q ratios were food, drink, and tobacco as well as personal and household products. By contrast, such industries as tires, home furnishing, and home improvement had relatively low composite Q ratios. As shown in the chart, composite Q ratio for most of the industries has increased over the past few years. However, this was not so much the case for home furnishing, home improvement, and tires.44
    • Consumer Business contactsFor Deloitte Touche Tohmatsu Limited (DTTL) and its member firmsDTTL Global Leader, East Africa Spain Asia PacificConsumer Business John Kiarie Juan Jose Roque Asia Pacific ConsumerLawrence Hutter jkiarie@deloitte.co.ke jroque@deloitte.es Business LeaderDeloitte Touche Tohmatsu Yoshio MatsushitaLimited Finland Sweden Deloitte Japanlhutter@deloitte.co.uk Kari Ekholm Lars Egenaes yomatsushita@tohmatsu.co.jp kari.ekholm@deloitte.fi legenaes@deloitte.seMarketing AustraliaKarthryn Cordes France Switzerland Simon CookDeloitte Touche Tohmatsu Antoine De Riedmatten Howard Da Silva simcook@deloitte.com.auLimited aderiedmatten@deloitte.fr hdasilva@deloitte.chkcordes@deloitte.com China Germany Turkey Eric TangDeloitte Research Peter Thormann Cem Sezgin eritang@deloitte.com.cnIra Kalish pthormann@deloitte.de csezgin@deloitte.comDeloitte Services LP David Lungikalish@deloitte.com Greece Ukraine dalung@deloitte.com.cn Dimitris Koutsopoulos Andriy BulakhConsumer Products Leaders dkoutsopoulos@deloitte.gr abulakh@deloitte.ua IndiaAmericas Shyamak TataNick Handrinos Ireland United Kingdom shyamaktata@deloitte.comDeloitte Consulting LLP Kevin Sheehan Nigel Wixceynhandrinos@deloitte.com kesheehan@deloitte.ie nigelwixcey@deloitte.co.uk Japan Yoshio MatsushitaEurope, Middle East and Israel West Africa yomatsushita@tohmatsu.co.jpAfrica Israel Nakel Alain PenanguerLawrence Hutter inakel@deloitte.co.il apenanguer@deloitte.fr KoreaDeloitte Touche Tohmatsu Jae Il LeeLimited Italy Latin America jaeillee@deloitte.comlhutter@deloitte.co.uk Dario Righetti Latin America Consumer drighetti@deloitte.it Business Leader MalaysiaNorth America Omar Camacho Jeffrey SooCanada Netherlands Deloitte Mexico jefsoo@deloitte.comPeter Barr Erik Nanninga ocamacho@deloittemx.compbarr@deloitte.ca enanninga@deloitte.nl New Zealand Argentina/LATCO Lisa CruickshankUnited States Nigeria Daniel Varde lcruickshank@deloitte.co.nzPat Conroy John Robinson dvarde@deloitte.comDeloitte & Touche LLP jerobinson@deloitte.com Singaporepconroy@deloitte.com Brazil Eugene Ho Poland Reynaldo Saad eugeneho@deloitte.comEurope, Middle East and Dariusz Kraszewski rsaad@deloitte.comAfrica (EMEA) dkraszewski@deloittece.com TaiwanBelgium Chile Benjamin ShihKoen De Staercke Portugal Cristian Alvarez benjaminshih@deloitte.com.twkdestaercke@deloitte.com Luís Belo cralvarez@deloitte.com lbelo@deloitte.ptCzech Republic/Eastern MexicoEurope Russia/CIS Omar CamachoAaron Martin Alexander Dorofeyev ocamacho@deloittemx.comaamartin@deloittece.com adorofeyev@deloitte.ruDenmark South AfricaAnn Moegelberg Rodger Georgeamoegelberg@deloitte.dk rogeorge@deloitte.co.za Global Powers of the Consumer Products Industry 2012 45
    • Notes46
    • Notes Global Powers of the Consumer Products Industry 2012 47
    • Notes48
    • If your smart phone is equipped to do so, please scan here to find outabout more Consumer Business publications from DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its networkof member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detaileddescription of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries.With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilitiesand deep local expertise to help clients succeed wherever they operate. Deloitte’s approximately 182,000 professionals arecommitted to becoming the standard of excellence.DisclaimerThis publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or theirrelated entities (collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services.Before making any decision or taking any action that may affect your finances or your business, you should consult a qualifiedprofessional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person whorelies on this publication.© 2012 Deloitte Global Services LimitedDesigned and produced by The Creative Studio at Deloitte, London. 17440AProduct number 100373